N-30D
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SSGA 2000 N-30D
N-30D TABLE OF CONTENTS
SSgA Fund Name N-30D Page
-------------- ----------
SSgA-SM-Life Solutions-SM- Funds ..................................
Income and Growth Fund .......................................
Balanced Fund ................................................
Growth Fund ..................................................
Money Market Fund .................................................
Matrix Equity Fund ................................................
Prime Money Market Fund ...........................................
Small Cap Fund ....................................................
US Treasury Money Market Fund .....................................
Yield Plus Fund ...................................................
Bond Market Fund ..................................................
S&P 500 Index Fund ................................................
Active International Fund .........................................
Tax Free Money Market Fund ........................................
US Government Money Market Fund ...................................
Growth and Income Fund ............................................
Intermediate Fund .................................................
Intermediate Municipal Bond Fund...................................
Emerging Markets Fund .............................................
Tuckerman Active REIT Fund ........................................
International Growth Opportunities ................................
High Yield Bond ...................................................
Special Equity ....................................................
Aggressive Equity Fund ............................................
IAM Shares Fund ...................................................
[COVER GRAPHIC]
SSgA(R) funds
ANNUAL REPORT
Life Solutions Funds
August 31, 2000
SSgA(R) Life Solutions(sm) Funds
Income and Growth Fund
Balanced Fund
Growth Fund
Annual Report
August 31, 2000
Table of Contents
Page
Chairman's Letter ................................................... 4
Portfolio Management Discussion and Analysis ........................ 6
Report of Independent Accountants ................................... 11
Income and Growth Fund Financial Statements ......................... 12
Financial Highlights ................................................ 16
Balanced Fund Financial Statements .................................. 18
Financial Highlights .............................................. 22
Growth Fund Financial Statements .................................... 24
Financial Highlights .............................................. 28
Notes to Financial Statements ....................................... 29
Tax Information ..................................................... 37
Fund Management and Service Providers ............................... 38
"SSgA(R)" is a registered trademark and "Life Solutions(sm)" is a registered
service mark of State Street Corporation and is licensed for use by the SSgA
Funds.
This report is prepared from the books and records of the Funds and it is
submitted for the general information of shareholders. This information is for
distribution to prospective investors only when preceded or accompanied by a
SSgA Funds Prospectus containing more complete information concerning the
investment objectives and operations of the Funds, charges and expenses. The
Prospectus should be read carefully before an investment is made.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results. International markets
entail different risks than those typically associated with domestic markets,
including currency fluctuations, political and economic instability, accounting
changes and foreign taxation. Securities may be less liquid and more volatile.
Please see the Prospectus for further details. Russell Fund Distributors, Inc.,
is the distributor of the SSgA Funds.
SSgA Life Solutions Funds
--------------------------------------------------------------------------------
Letter From the Chairman of State Street Global Advisors
--------------------------------------------------------------------------------
Dear Shareholders,
It is our pleasure to provide you with the SSgA Funds annual report for the
fiscal year ended August 31, 2000. The SSgA Fund Family has grown to include
twenty-four portfolios with over $21 billion in assets as of August 31, 2000.
The Fund Family provides a wide range of strategies covering the world's major
markets. The enclosed information provides an overview of the investment process
for the SSgA Life Solutions Funds. This overview contains the portfolio
management discussion, performance updates and financial information for the
Fund.
In an ongoing effort to develop competitive products and services that provide
investment solutions for our clients, we have added the SSgA Intermediate
Municipal Bond Fund to the SSgA Fund Family. This Fund's investment objective
seeks to provide federally tax-exempt current income by investing primarily in a
diversified portfolio of municipal debt securities with a dollar-weighted
average maturity between three and ten years.
We are also pleased with the success of our SSgA Emerging Markets and SSgA
Growth and Income Funds as they were included in Money(R) Magazine's June 2000
issue listing of the 'Top 100 Mutual Funds'. This is the second year in a row
that these funds have been selected.
Additionally, the SSgA Tax Free Money Market and the SSgA Active International
Funds have achieved five-year performance history during the 2000 fiscal year.
Currently, all of our SSgA Money Market Funds have at least a five-year
performance history. We strive to meet our clients' needs by providing funds
with long-term records and competitive performance.
We would like to thank you for choosing the SSgA Funds. Our reputation is based
on our tradition of designing and delivering exceptional financial services to
our clients. We look forward to continue sharing the benefit of our experience
with you.
Sincerely,
/s/ Nicholas A. Lopardo
Nicholas A. Lopardo
State Street Global Advisors
Chairman and Chief Executive Officer
/s/ Timothy B. Harbert
Timothy B. Harbert
State Street Global Advisors
President and Chief Operating Officer, SSgA
4 Annual Report
SSgA Life Solutions Funds
--------------------------------------------------------------------------------
Management of the Funds
--------------------------------------------------------------------------------
[PHOTO]
Nicholas A. Lopardo
Chairman and Chief Executive Officer
[PHOTO]
Timothy B. Harbert
President and Chief Operating Officer
A Team Approach to Investment Management
Our investment strategies are the product of the combined experience of our
professional staff. Portfolio Managers work together to develop and enhance the
techniques that drive our investment processes. As a result, the portfolios we
manage benefit from the knowledge of the entire team.
Mr. Heydon Traub, CFA, Principal, has been the portfolio manager primarily
responsible for investment decisions regarding the SSgA Life Solutions Funds
since April 1999. He joined the firm in 1987, and currently leads a team
responsible for the management of client assets in excess of $10 billion
invested in 50 developed and emerging markets. He is one of the developers of
the firm's country, stock, and currency selection processes and continues to
lead the research effort to enhance those strategies. Mr. Traub has written
several articles which have been published in leading investment journals and he
currently writes a monthly column on global investing for the Boston Business
Journal. He holds a BA in Economics and an MBA in Finance and Accounting from
the University if Chicago. There are two other portfolio managers working with
Mr. Traub.
Annual Report 5
SSgA Life Solutions Funds
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
Strategy: Each Life Solutions Fund allocates its assets by investing in shares
of a combination of underlying SSgA funds. By investing in the underlying
component funds, each Life Solutions Fund seeks to maintain different
allocations among classes of equity, international equity, fixed income and
short-term assets funds (including money market funds) depending on the Life
Solutions Fund's investment objective and risk profile. Allocating investments
this way permits each Life Solutions Fund to seek to optimize performance
consistent with its investment objective.
Objective: Life Solutions Income and Growth Fund seeks income and, secondarily,
long-term growth of capital.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT

================================================================================
--------------------------------------------------------------------------------
SSgA Life Solutions Growth Fund
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
---------------------- ------------- ------------
1 Year $ 11,715 17.15%
Inception $ 14,564 12.61%+
--------------------------------------------------------------------------------
Composite Market Index **
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
---------------------- ------------- ------------
1 Year $ 11,650 16.50%
Inception $ 15,956 15.90%+
--------------------------------------------------------------------------------
Russell 3000(R) Index ++
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
---------------------- ------------- ------------
1 Year $ 12,063 20.63%
Inception $ 17,890 20.16%+
--------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index +++
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
---------------------- ------------- ------------
1 Year $ 10,756 7.56%
Inception $ 12,205 6.50%+
** 65% Russell 3000(R) Index
15% MSCI EAFE Index
20% Lehman Brothers Aggregate Bond Index
See related Notes for Index definitions.
8 Annual Report
SSgA Life Solutions Funds
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
Performance Review
The SSgA Life Solutions Funds is a family of balanced funds targeted to meet the
investment objectives of investors with varying degrees of risk tolerance. The
family consists of three Funds with distinct risk/return profiles. The most
conservative, the Life Solutions Income and Growth Fund, is targeted to
investors with limited tolerance for equity market volatility. The Life
Solutions Balanced Fund is targeted at those individuals willing to undertake
greater equity exposure, but who are also looking for fixed income exposure to
balance return patterns. The Life Solutions Growth Fund is designed for those
investors aggressively seeking return. The Fund is designed to provide broadly
diversified equity exposure with the ability to have limited exposure to fixed
income and cash securities.
For the fiscal year ended August 31, 2000, the Life Solutions Funds returned
11.73%, 14.59%, and 17.15% for the Income and Growth, Balanced, and Growth
Funds, respectively. The composite benchmarks over the last twelve months for
the three Funds returned 12.37%, 14.46%, and 16.50%, respectively. The Funds'
performance is net of operating expenses, whereas Index results do not include
expenses of any kind.
The US equity component of the composite benchmark is the Russell 3000(R) Index,
an unmanaged index of US equities representing approximately the largest 3000 US
companies by market value. The international component is comprised of the
Morgan Stanley Capital International Europe, Australia, Far East (MSCI EAFE)
Index, an unmanaged index reflecting the performance of international markets
around the globe. The fixed income component of the composite benchmark is the
Lehman Brothers Aggregate Bond Index, an unmanaged index capturing the
performance of the broad US bond markets, including government, investment grade
corporate, and mortgage-backed securities.
Market and Portfolio Highlights
Returns for the Funds were assisted over the past year by strong equity markets
in the US, including a long awaited surge from the small-cap sector. In
particular, the more aggressive Funds (Balanced and Growth) benefited from
having the majority of their assets in equities. Returns were driven by large US
stocks, which make up a substantial portion of the Funds, as the S&P 500(R)
returned over 16% for the past fiscal year. The Funds also gained from their
exposure to small cap US stocks, as they returned 27% as measured by the Russell
2000(R) Index. Overall Fund returns were curtailed slightly by their respective
allocations in fixed income issues, which rose around 7% as measured by the
Lehman Brothers Aggregate Bond Index.
Performance relative to the composite benchmarks was helped dramatically by the
holding of the SSgA Aggressive Equity Fund, which soared over 112% for the
fiscal year. This Fund benefited from the surge in small cap growth stocks, and
specifically, its investment in Initial Public Offerings (IPOs). Although
participating in IPOs is within the Aggressive Equity Fund's investment
guidelines, there is no guarantee that this Fund will continue to participate in
the IPO market in the future. Additionally, due to their inherent volatility,
there can be no assurance that IPOs will continue to have a positive impact on
the Aggressive Equity Fund's performance.
The continued strong performance of growth stocks caused the SSgA Matrix Fund
and the SSgA Active International Fund to lag their benchmarks. Ironically, the
Managers' focus on companies which have improved earnings outlooks and lower
price multiples than the market has hurt stock selection over the last year.
Despite the difficulties in the large-cap Funds, strong performance in small-cap
stocks overcame these issues to help the Balanced and the Growth Funds to
outperform their respective benchmarks.
The Funds continue to be positioned somewhat defensively as the Manager views
large-cap US stocks to be less attractive than international stocks or bonds.
International stocks have had disappointing performance recently, due primarily
to a dramatic decline in the Euro. The Manager believes there will not be a
repeat of this kind of decline, making for a more appealing climate for European
stocks. Japan also has had its recent problems, but important economic and
earnings growth expectations call for a strong improvement in both Japan and
Europe.
Annual Report 9
SSgA Life Solutions Funds
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Portfolio Allocation by Asset Class
as of 08/31/00
--------------------------------------------------------------------------------
Income and
Growth Balanced Growth
Fund Fund Fund
---------- -------- --------
Equities:
Domestic 28.4% 43.6% 58.7%
International 7.7 12.6 17.6
---------- -------- --------
36.1 56.2 76.3
Bonds 61.9 42.0 22.1
Cash, net 2.0 1.8 1.6
---------- -------- --------
100.0% 100.0% 100.0%
========== ======== ========
--------------------------------------------------------------------------------
----------------------
Notes: The following notes relate to the Growth of $10,000 graph and table on
the preceding pages.
* The Life Solutions Funds commenced operations on July 1, 1997. Index
comparisons also began on July 1, 1997.
+ Annualized.
Index Definitions:
++ The Russell 3000(R) Index is comprised of the 3,000 largest US companies
based on total market capitalization, representing approximately 98% of
the investable US equity market.
+++ The Lehman Brothers Aggregate Bond Index is composed of all bonds covered
by the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed
Securities Index, and the Asset-Backed Securities Index. Total returns
comprises price appreciation/depreciation and income as a percentage of
the original investment.
The Morgan Stanley Capital International Europe, Australia, Far East Index
is an index composed of an arithmetic, market value-weighted average of
the performance of over 1,100 securities listed on the stock exchanges of
the countries of Europe, Australia, and the Far East. The Index is
calculated on a total-return basis, which includes reinvestment of net
dividends after deduction of withholding taxes.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results.
10 Annual Report
Report of Independent Accountants
To the Shareholders and Board of Trustees of the SSgA Funds:
In our opinion, the accompanying statements of net assets, and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
SSgA Life Solutions Funds (in this report, comprised of SSgA Life Solutions
Income and Growth Fund, SSgA Life Solutions Balanced Fund, and SSgA Life
Solutions Growth Fund)(the "Funds") at August 31, 2000, the results of their
operations for the fiscal year then ended, and the changes in their net assets
for each of the two fiscal years in the period then ended, and the financial
highlights for each of the three fiscal years in the period then ended and for
the period July 1, 1997 (commencement of operations) to August 31, 1997, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Funds' management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 2000 by
correspondence with the transfer agent, provide a reasonable basis for our
opinion.
Boston, Massachusetts
October 11, 2000
/s/ PricewaterhouseCoopers LLP
Annual Report 11
SSgA Life Solutions
Income and Growth Fund
Statement of Net Assets August 31, 2000
Number Value
of (000)
Shares $
---------- ---------
Investments
Domestic Equities - 28.4%
SSgA Aggressive Equity Fund............................. 32,377 646
SSgA Matrix Equity Fund................................. 181,822 3,093
SSgA S&P 500 Index Fund................................. 61,989 1,637
SSgA Small Cap Fund..................................... 27,989 635
------
6,011
------
International Equities - 7.7%
SSgA Active International Fund.......................... 140,014 1,522
SSgA Emerging Markets Fund.............................. 9,032 103
------
1,625
------
Bonds - 61.9%
SSgA Bond Market Fund................................... 1,214,027 11,776
SSgA High Yield Bond Fund............................... 130,594 1,324
------
13,100
------
Short-Term Assets - 2.0%
SSgA Money Market Fund (a).............................. 422,561 423
------
Total Investments - 100.0%
(identified cost $20,774)......................................... 21,159
------
Other Assets and Liabilities
Deferred organization expenses.................................... 16
Receivables from Advisor.......................................... 34
Other assets...................................................... 11
Liabilities....................................................... (70)
------
Total Other Assets and Liabilities,
Net - (0.0%)...................................................... (9)
------
Net Assets - 100.0%............................................... 21,150
======
12 Annual Report
SSgA Life Solutions
Income and Growth Fund
Statement of Net Assets, continued August 31, 2000
Value
(000)
$
---------
Net Assets Consist of:
Undistributed net investment income.................................. 346
Accumulated net realized gain (loss)................................. 95
Unrealized appreciation (depreciation) on investments................ 385
Shares of beneficial interest........................................ 2
Additional paid-in capital........................................... 20,322
------
Net Assets........................................................... 21,150
======
Net Asset Value, offering and redemption price per share:
($21,149,852 divided by 1,600,487 shares of $.001 par value
shares of beneficial interest outstanding)........................ 13.21
======
(a) At amortized cost, which approximates market.
See accompanying notes which are an integral part of the financial statements.
Annual Report 13
SSgA Life Solutions
Income and Growth Fund
Statement of Operations
Amounts in thousands For the Fiscal Year Ended August 31, 2000

See accompanying notes which are an integral part of the financial statements.
14 Annual Report
SSgA Life Solutions
Income and Growth Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Year Ended August 31,

See accompanying notes which are an integral part of the financial statements.
Annual Report 15
SSgA Life Solutions
Income and Growth Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

See accompanying notes which are an integral part of the financial statements.
20 Annual Report
SSgA Life Solutions
Balanced Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Years Ended August 31,

See accompanying notes which are an integral part of the financial statements.
Annual Report 21
SSgA Life Solutions
Balanced Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

See accompanying notes which are an integral part of the financial statements.
26 Annual Report
SSgA Life Solutions
Growth Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Years Ended August 31,

See accompanying notes which are an integral part of the financial statements.
Annual Report 27
SSgA Life Solutions
Growth Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

* For the period July 1, 1997 (commencement of operations) to August 31,
1997.
(a) For the periods subsequent to August 31, 1997, average month-end shares
outstanding were used for this calculation.
(b) Periods less than one year are not annualized.
(c) The ratios for the period ended August 31, 1997 are annualized.
28 Annual Report
SSgA
Life Solutions Funds
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on three portfolios,
the SSgA Life Solutions Income and Growth Fund, Balanced Fund and Growth
Fund (the "Funds"). The Investment Company is a registered and diversified
open-end investment company, as defined in the Investment Company Act of
1940, as amended (the "1940 Act"), that was organized as a Massachusetts
business trust on October 3, 1987 and operates under a First Amended and
Restated Master Trust Agreement, dated October 13, 1993, as amended (the
"Agreement"). The Investment Company's Agreement permits the Board of
Trustees to issue an unlimited number of full and fractional shares of
beneficial interest at a $.001 par value. The Funds are designed primarily
for tax-advantaged retirement accounts and other long-term investment
strategies. Each Fund allocates its assets by investing in shares of a
combination of the Investment Company's portfolios (the "Underlying
Funds"). The table below illustrates the equity, bond and short-term fund
asset allocation ranges for each Fund.

* International equities are included in the total equity exposure
indicated above and should not exceed the listed percentages.
Annual Report 29
SSgA
Life Solutions Funds
Notes to Financial Statements, continued
August 31, 2000
Objectives of the Underlying Funds:
The Life Solutions Funds are comprised of various combinations of the
Underlying Funds. Each of the Life Solutions Funds will invest in at least
six of the Underlying Funds. The Board of Trustees has approved investment
in all of the Underlying Funds presented above. The fundamental investment
objectives of the Underlying Funds utilized by the Life Solutions Funds
are listed below.
SSgA S&P 500 Index Fund: To seek to replicate the total return of the S&P
500 Index.
SSgA Matrix Equity Fund: To provide total returns that exceed over time
the S&P 500 Index through investment in equity securities.
SSgA Small Cap Fund: To maximize total return through investment in equity
securities; under normal market conditions, at least 65% of total assets
will be invested in securities of smaller capitalized issuers.
SSgA Growth and Income Fund: To achieve long-term capital growth, current
income and growth of income primarily through investments in equity
securities.
SSgA Special Equity Fund: To maximize total return through investment in
mid- and small capitalization US equity securities.
SSgA Tuckerman Active REIT Fund: To provide income and capital growth by
investing primarily in publicly traded securities of real estate
companies.
SSgA Aggressive Equity Fund: To maximize total return through investing in
US equity securities that are under-valued relative to their growth
potential as measured by SSgA's proprietary models.
SSgA Active International Fund: To provide long-term capital growth by
investing primarily in securities of foreign issuers.
SSgA Emerging Markets Fund: To provide maximum total return, primarily
through capital appreciation, by investing in securities of foreign
issuers.
SSgA International Growth Opportunities Fund: To provide long-term capital
growth by investing primarily in securities of foreign issuers.
SSgA Bond Market Fund: To maximize total return by investing in fixed
income securities, including, but not limited to, those represented by the
Lehman Brothers Aggregate Bond Index (the "LBAB Index").
SSgA Intermediate Fund: To seek a high level of current income while
preserving principal by investing primarily in a diversified portfolio of
debt securities with a dollar-weighted average maturity between three and
ten years.
SSgA High Yield Bond Fund: To maximize total return by investing in fixed
income securities, including, but not limited to, those represented by the
Lehman Brothers High Yield Bond Index.
30 Annual Report
SSgA
Life Solutions Funds
Notes to Financial Statements, continued
August 31, 2000
SSgA Yield Plus Fund: To seek high current income and liquidity by
investing in a diversified portfolio of high-quality debt securities and
by maintaining a portfolio duration of one year or less.
SSgA Money Market Fund: To maximize current income, to the extent
consistent with the preservation of capital and liquidity and the
maintenance of a stable $1.00 per share net asset value, by investing in
dollar dominated securities with remaining maturities of one year or less.
SSgA US Government Money Market Fund: To maximize current income to the
extent consistent with the preservation of capital and liquidity and the
maintenance of a stable $1.00 per share net asset value, by investing in
obligations of the US Government or its agencies or instrumentalities with
remaining maturities of one year or less.
2. Significant Accounting Policies
The Funds' financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Funds in the preparation
of their financial statements.
Security valuation: Investments in Underlying Funds are valued at the net
asset value per share of each Underlying Fund as of the close of regular
trading on the New York Stock Exchange.
Securities transactions: Securities transactions of the Underlying Funds
are recorded on a trade date basis. Realized gains and losses from
securities transactions are recorded on the basis of identified cost.
Investment income: Distributions of income and capital gains are recorded
from the Underlying Funds on the ex-dividend date.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each Fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each Fund's shareholders without regard to the income
and capital gains (or losses) of the other funds.
It is each Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Funds to distribute all of their taxable income. Therefore, the Funds
paid no federal income taxes and no federal income tax provision was
required.
Annual Report 31
SSgA
Life Solutions Funds
Notes to Financial Statements, continued
August 31, 2000
The Funds' aggregate cost of investments and the composition of unrealized
appreciation and depreciation of investment securities for federal income
tax purposes as of August 31, 2000 are as follows:

Dividends and distributions to shareholders: Income dividends and capital
gain distributions, if any, are recorded on the ex-dividend date.
Dividends are generally declared and paid quarterly. Capital gain
distributions are generally declared and paid annually. An additional
distribution may be paid by the Funds to avoid imposition of federal
income tax on any remaining undistributed net investment income and
capital gains.
The timing and characterization of certain income and capital gain
distributions are determined in accordance with federal tax regulations
which may differ from generally accepted accounting principles ("GAAP").
As a result, net investment income and net realized gain (or loss) from
investment transactions for a reporting year may differ significantly from
distributions during such year. The differences between tax regulations
and GAAP relate primarily to certain securities sold at a loss.
Accordingly, the Funds may periodically make reclassifications among
certain of their capital accounts without impacting their net asset value.
Expenses: The Funds will pay all of their expenses other than those
expressly assumed by the Adviser and the Administrator. Certain expenses
of the investment company not directly attributable to any one Fund but
applicable to all Funds, such as Trustee fees, insurance, legal and other
expenses will be allocated to each Fund based on each Fund's net assets.
Expenses included in the accompanying statements of operations reflect the
expenses of each Fund and do not include any expenses associated with the
Underlying Funds.
Deferred organization expenses: The Funds have incurred expenses in
connection with their organization. These costs were deferred and are
being amortized over 60 months on a straight-line basis.
3. Securities Transactions
Investment transactions: During the year ended August 31, 2000, purchases
and sales of the Underlying Funds aggregated to the following:
Purchases Sales
------------ -------------
Income and Growth Fund $ 7,263,296 $ 15,302,389
Balanced Fund 44,928,938 86,060,032
Growth Fund 20,088,573 45,123,408
32 Annual Report
SSgA
Life Solutions Funds
Notes to Financial Statements, continued
August 31, 2000
4. Related Parties
Adviser: The Investment Company has an investment advisory agreement with
State Street Bank and Trust Company (the "Adviser") under which the
Adviser, through State Street Global Advisors, the investment management
group of the Adviser, directs the investments of the Fund in accordance
with its investment objectives, policies, and limitations. The Funds will
not be charged a fee by the Adviser. However, each Fund, as a shareholder
in the Underlying Funds, will bear its proportionate share of any
investment advisory fees and other expenses paid by the Underlying Funds.
Each Underlying Fund pays the Adviser a fee, calculated daily and paid
monthly, that on an annual basis is equal to a certain percentage of each
Underlying Fund's average daily net assets. For the year ended August 31,
2000, the Adviser voluntarily agreed to reimburse the Funds for all
expenses (except 12b-1 distribution and shareholder servicing expenses) in
excess of .30% of average daily net assets on an annual basis. The total
amount of reimbursement for the Income and Growth Fund for the year ended
August 31, 2000 was $22,478. As of August 31, 2000, the receivable due
from the Adviser for reimbursed expenses in excess of the expense cap has
been netted against the Advisory fee payable.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items. For
these services, the Underlying Funds pay the Administrator a combined fee
that on an annual basis is equal to the percentages, stated below, of
their average aggregate daily net assets. The Funds will not be charged a
fee by the Administrator. Instead, the Administrator will assess
administration fees on the Underlying Funds. For the period September 1,
1999 to April 30, 2000, each Underlying Fund will pay indirectly its
proportionate share of the following: All Underlying Funds combined
(except Active International, Emerging Markets and International Growth
Opportunities) up to and including $500 million - .06%; over $500 million
up to and including $1 billion - .05%; and over $1 billion - .03%. Active
International, Emerging Markets and International Growth Opportunities up
to and including $500 million - .07%; over $500 million up to and
including $1 billion - .06%; over $1 billion up to and including $1.5
billion - .04%; and over $1.5 billion - .03%. Effective May 1, 2000, each
fund will pay indirectly its proportionate share of the following:

Money Market Portfolios $0 up to and including $15 billion .0315%
over $15 billion .0290%
U.S. Equity Portfolios $0 up to and including $2 billion .0315%
over $2 billion .0290%
U.S. Fixed Income Portfolios $0 up to and including $1 billion .0315%
over $1 billion .0290%
International Portfolios $0 up to and including $1 billion .0700%
over $1 billion .0500%
Feeder Portfolios $0 up to and including $1 billion .0315%
over $1 billion .0100%

Annual Report 33
SSgA
Life Solutions Funds
Notes to Financial Statements, continued
August 31, 2000
The percentage of the fee paid by the each Underlying Fund is equal to the
percentage of average aggregate daily net assets that are attributable to
that Underlying Fund. The Administrator will also receive reimbursement of
expenses it incurs in connection with establishing new investment
portfolios, including the Funds.
Distributor and Shareholder Servicing: Pursuant to the Distribution
Agreement with Investment Company, Russell Fund Distributors, Inc.
("Distributor"), a wholly-owned subsidiary of the Administrator, serves as
distributor for all Investment Company portfolio shares, including the
Funds.
The Funds and Underlying Funds have a distribution plan pursuant to Rule
12b-1 (the "Plan") under the 1940 Act. The purpose of the Plan is to
provide for the payment of certain Investment Company distribution and
shareholder servicing expenses. Under the Plan, Distributor will be
reimbursed in an amount up to .25% of the Funds and Underlying Funds'
average annual net assets for distribution-related and shareholder
servicing expenses. Payments under the Plan will be made to Distributor to
finance activity that is intended to result in the sale and retention of
the Funds and Underlying Fund shares including: (1) payments made to
certain broker-dealers, investments advisors and other third party
intermediaries; (2) the costs of prospectuses, reports to shareholders and
sales literature; (3) advertising; and (4) expenses incurred in connection
with the promotion and sale of shares, including Distributor's overhead
expenses for rent, office supplies, equipment, travel, communication,
compensation and benefits of sales personnel.
Payments to Distributor, as well as payments to Service Organizations from
a Fund, are not permitted by the Plan to exceed .25% of a Fund's average
net asset value per year. Any payments that are required to be made by the
Distribution Agreement and any Service Agreement but could not be made
because of the .25% limitation may be carried forward and paid in
subsequent years so long as the Plan is in effect. A Fund's liability for
any such expenses carried forward shall terminate at the end of two years
following the year in which the expenditure was incurred. The Trustees or
a majority of the Fund's shareholders have the right, however, to
terminate the Plan and all payments thereunder at anytime. The Fund will
not be obligated to reimburse the Distributor for carryover expenses
subsequent to the Plan's termination or noncontinuance. There were no
expenses carried over as of August 31, 2000. Service Organizations will be
responsible for prompt transmission of purchase and redemption orders and
may charge fees for their services.
The Funds have entered into Shareholder Service Agreements with State
Street Solutions ("Solutions"), State Street Brokerage Services, Inc.
("SSBSI"), the State Street Retirement Investment Services Division
("RIS"), (collectively the "Agents"), as well as other non-related third
party service providers. For these services, the Fund pays .13% each,
based upon the average daily net asset value of all Fund shares held by or
for customers of these Agents. For the year ended August 31, 2000, the
Funds were charged shareholder servicing expenses by Solutions, SSBSI and
RIS as follows:
Solutions SSBSI RIS
--------- --------- ---------
Income and Growth Fund $ 23,380 $ 528 $ 4,032
Balanced Fund 107,679 558 34,799
Growth Fund 75,489 301 5,703
34 Annual Report
SSgA
Life Solutions Funds
Notes to Financial Statements, continued
August 31, 2000
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Income and
Growth Fund Balanced Fund Growth Fund
----------- ------------- -----------
Administration fees $ 78 $ 100 $ 145
Bookkeeping service fees 4,035 7,672 14,491
Distribution 4,356 18,297 24,607
Shareholder servicing fees 4,870 2,174 13,688
Transfer agent fees 403 780 2,135
----------- ------------- -----------
$ 13,742 $ 29,023 $ 55,066
=========== ============= ===========
Beneficial Interest: In the Income and Growth Fund, as of August 31, 2000,
two shareholders (who were also affiliates of the Investment Company) were
record owners of approximately 70% and 12%, respectively, of the total
outstanding shares of the Fund. In the Balanced Fund, as of August 31,
2000, two shareholders (who were also affiliates of the Investment
Company) were record owners of approximately 85% and 11%, respectively, of
the total outstanding shares of the Fund. In the Growth Fund, as of August
31, 2000, two shareholders (who were also affiliates of the Investment
Company) were record owners of approximately 80% and 16% respectively, of
the total outstanding shares of the Fund.
Transactions with Affiliated Companies: An affiliated company is a company
in which a Fund has ownership of at least 5% of the voting securities.
Transactions during the year ended August 31, 2000 with Underlying Funds
which are or were affiliates are as follows:

6. Interfund Lending Program
The Funds and all other funds of the Investment Company received from the
Securities and Exchange Commission an exemptive order on December 23, 1999
to establish and operate an Interfund Credit Facility. This allows the
Funds to directly lend to and borrow money from the SSgA Money Market Fund
for temporary purposes in accordance with certain conditions. The
borrowing Funds are charged the average of the current Repo Rate and the
Bank Loan Rate. The Funds did not utilize the interfund lending program
during this year.
36 Annual Report
SSgA
Life Solutions Funds
Tax Information
August 31, 2000 (Unaudited)
The Fund paid distributions of $532,709, $3,398,035 and $2,221,590 for Income
and Growth Fund, Balanced Fund and Growth Fund, respectively, from net long-term
capital gains during its taxable year ended August 31, 2000.
Please consult a tax advisor for questions about federal or state income
tax laws.
Annual Report 37
SSgA Life Solutions Funds
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
--------------------------------------------------------------------------------
Trustees
Lynn L. Anderson, Chairman
William L. Marshall
Steven J. Mastrovich
Patrick J. Riley
Richard D. Shirk
Bruce D. Taber
Henry W. Todd
Officers
Lynn L. Anderson, President, Treasurer and CEO
Mark E. Swanson, Treasurer and Principal Accounting Officer
J. David Griswold, Vice President and Secretary
Deedra S. Walkey, Assistant Secretary
Rick J. Chase, Assistant Treasurer
Carla L. Anderson, Assistant Secretary
Investment Adviser
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Custodian, Transfer Agent and
Office of Shareholder Inquiries
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
(800) 647-7327
Distributor
Russell Fund Distributors, Inc.
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
Administrator
Frank Russell Investment Management Company
909 A Street
Tacoma, Washington 98402
Legal Counsel
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Independent Accountants
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
38 Annual Report
[COVER GRAPHIC]
SSgA(R) funds
ANNUAL REPORT
Money Market Fund
August 31, 2000
SSgA(R) Funds
Money Market Fund
Annual Report
August 31, 2000
Table of Contents
Page
Chairman's Letter........................................................ 4
Portfolio Management Discussion and Analysis............................. 6
Report of Independent Accountants........................................ 8
Financial Statements..................................................... 9
Financial Highlights..................................................... 18
Notes to Financial Statements............................................ 19
Fund Management and Service Providers.................................... 23
"SSgA(R)" is a registered trademark of State Street Corporation and is licensed
for use by the SSgA Funds.
This report is prepared from the books and records of the Fund and it is
submitted for the general information of shareholders. This information is for
distribution to prospective investors only when preceded or accompanied by a
SSgA Funds Prospectus containing more complete information concerning the
investment objective and operations of the Fund, charges and expenses. The
Prospectus should be read carefully before an investment is made.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results. An investment in a money
market fund is neither insured nor guaranteed by the US government. There can be
no assurance that a money market fund will be able to maintain a stable net
asset value of $1.00 per share. Russell Fund Distributors, Inc., is the
distributor of the SSgA Funds.
SSgA Money Market Fund
--------------------------------------------------------------------------------
Letter From the Chairman of State Street Global Advisors
--------------------------------------------------------------------------------
Dear Shareholders,
It is our pleasure to provide you with the SSgA Funds annual report for the
fiscal year ended August 31, 2000. The SSgA Fund Family has grown to include
twenty-four portfolios with over $21 billion in assets as of August 31, 2000.
The Fund Family provides a wide range of strategies covering the world's major
markets. The enclosed information provides an overview of the investment process
for the SSgA Money Market Fund. This overview contains the portfolio management
discussion, performance updates and financial information for the Fund.
In an ongoing effort to develop competitive products and services that provide
investment solutions for our clients, we have added the SSgA Intermediate
Municipal Bond Fund to the SSgA Fund Family. This Fund's investment objective
seeks to provide federally tax-exempt current income by investing primarily in a
diversified portfolio of municipal debt securities with a dollar-weighted
average maturity between three and ten years.
We are also pleased with the success of our SSgA Emerging Markets and SSgA
Growth and Income Funds as they were included in Money(R) Magazine's June 2000
issue listing of the 'Top 100 Mutual Funds'. This is the second year in a row
that these funds have been selected.
Additionally, the SSgA Tax Free Money Market and the SSgA Active International
Funds have achieved five-year performance history during the 2000 fiscal year.
Currently, all of our SSgA Money Market Funds have at least a five-year
performance history. We strive to meet our clients' needs by providing funds
with long-term records and competitive performance.
We would like to thank you for choosing the SSgA Funds. Our reputation is based
on our tradition of designing and delivering exceptional financial services to
our clients. We look forward to continue sharing the benefit of our experience
with you.
Sincerely,
/s/ Nicholas A. Lopardo
Nicholas A. Lopardo
State Street Global Advisors
Chairman and Chief Executive Officer
/s/ Timothy B. Harbert
Timothy B. Harbert
State Street Global Advisors
President and Chief Operating Officer, SSgA
4 Annual Report
SSgA Money Market Fund
--------------------------------------------------------------------------------
Management of the Funds
--------------------------------------------------------------------------------
[PHOTO]
Nicholas A. Lopardo
Chairman and Chief Executive Officer
[PHOTO]
Timothy B. Harbert
President and Chief Operating Officer
A Team Approach to Investment Management
Our investment strategies are the product of the combined experience of our
professional staff. Portfolio Managers work together to develop and enhance the
techniques that drive our investment processes. As a result, the portfolios we
manage benefit from the knowledge of the entire team.
Ms. Lisa Hatfield, Principal, has been the portfolio manager primarily
responsible for investment decisions regarding the SSgA Money Market Fund since
January 1998. Ms. Hatfield is the Unit Head of the cash desk with responsibility
for the SSgA money market funds, several short-term funds and enhanced cash
portfolios. Prior to joining SSgA, she was a portfolio manager with State
Street's Investment Research Department, where she managed the securities
lending reinvestment funds since their inception in 1987, as well as other money
market portfolios. She received a BS from Suffolk University. There are ten
other portfolio managers working with Ms. Hatfield.
Annual Report 5
SSgA Money Market Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
Objective: Maximize current income while preserving capital and liquidity.
Invests in: High quality money market instruments including certificates of
deposit, time deposits, bankers acceptances, commercial paper, corporate
medium-term notes, US Government Treasury and Agency notes, and repurchase
agreements.
Strategy: Fund Managers base their decisions on the relative attractiveness of
different money market investments, which vary depending on the general level of
interest rates as well as supply and demand imbalances in the market.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Dates Money Market Salomon Smith Barney 3-Month T-Bill Index**
* $10,000 $10,000
1990 $10,848 $10,815
1991 $11,616 $11,523
1992 $12,160 $12,014
1993 $12,585 $12,383
1994 $12,975 $12,824
1995 $13,691 $13,539
1996 $14,425 $14,263
1997 $15,187 $15,012
1998 $16,009 $15,796
1999 $16,787 $16,530
2000 $16,369 $16,127
================================================================================
Performance Review
The Fund had a total return of 5.78% for the fiscal year ended August 31, 2000.
This compared favorably to the Salomon Smith Barney 3-Month Treasury Bill Index
return of 5.51% for the same period. The Fund's performance is net of operating
expenses, while Index results do not include expenses of any kind. The Salomon
Smith Barney 3-Month Treasury Bill Index was chosen as a standard, well-known
representation of money market rates.
The market environment for the last year began with the Federal Open Market
Committee (FOMC) tightening monetary policy due to strong domestic growth and
rejuvenated demand from abroad. The FOMC raised rates by 25 basis points in
June, August and November 1999, bringing the Fed Funds target from 4.75% to
5.50%. The FOMC took no action at its December meeting, but followed a strategy
of injecting the economy with massive amounts of cash to ease Y2K liquidity
concerns. Fourth quarter GDP logged an impressive 8.3% due to Y2K inventory
building
--------------------------------------------------------------------------------
SSgA Money Market Fund
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
------------------- ------------ -------
1 Year $ 10,578 5.78%
5 Years $ 12,970 5.34%+
10 Years $ 16,369 5.05%+
--------------------------------------------------------------------------------
Salomon Smith Barney 3-Month Treasury Bill Index
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
------------------- ------------ -------
1 Year $ 10,551 5.51%
5 Years $ 12,882 5.20%+
10 Years $ 16,127 4.89%+
See related Notes on following page.
6 Annual Report
SSgA Money Market Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
supported by the generous liquidity provisions from the Federal Reserve. This
surfeit of liquidity, in effect, loosened monetary policy when in fact tight
labor markets and excess demand called for tightening.
First quarter 2000 GDP followed with a 4.8% growth rate. The Federal Reserve
Board needed to take back the excess liquidity and slow the economy. The FOMC
did so by raising interest rates by 100 basis points in the first half of 2000.
Although GDP advanced 5.4% throughout the second quarter of 2000, fears of
inflation were tempered by the fact that productivity grew at 5% for the same
period. The FOMC opted to leave rates unchanged at the June and August meetings
while maintaining a cautious stance going forward. The Manager continues to be
cautious about future FOMC policy considering the trend in rising oil prices as
well as the upcoming presidential election.
Market and Portfolio Highlights
In the last fiscal year, the SSgA Money Market Fund was managed consistently
with its objective of providing safety of principal and liquidity by investing
in high quality investments and providing competitive returns. The Fund's net
assets decreased in size by $1.5 billion or 14.9% over the past year to $8.6
billion at August 31, 2000.
During the fall tightening period the Fund was managed with liquidity as a
primary concern, with maturing positions remaining in cash and very liquid
short-term securities throughout the last calendar quarter of 1999. This large
cash position served to hedge against Y2K liquidity concerns and helped with the
substantial swings in assets related to calendar year-end 1999. The 100 basis
points of tightening in the first half of 2000, combined with the market's
concern of further tightening, resulted in a very steep yield curve, with the
6-month LIBOR at 7.10% and the 12-month LIBOR at 7.50%. The Fund took the
opportunity to buy on market weakness and extended the Fund's average maturity.
By the end of August, the yield curve had stabilized with the 3-month LIBOR at
6.67%, the 6-month LIBOR at 6.80% and the 12-month LIBOR at 6.92%. The Fund's
average maturity ranged between 44 and 68 days, ending at 68 days at August 31,
2000, longer than its peer group average of 51 days as measured by iMoneyNet,
Inc. (formerly IBC Financial Data).
The Fund increased exposure in fixed rate securities, from 76.5% at August 31,
1999, to 85% on August 31, 2000. Fixed rate securities were selected over
floating rate securities, enabling the Fund to add yield in a rising rate
environment. The Fund increased exposure in 1- to 3-month asset-backed
commercial paper, which was priced 2 to 5 basis points cheaper than
corresponding-maturity bank and finance commercial paper. With the yield curve's
potential to steepen on negative inflation news, the Manager will look for those
opportunities to extend duration and add yield.
--------------------------------------------------------
Top Five Holdings (by investment type,
as a percent of Total Investments) August 31, 2000
--------------------------------------------------------
Domestic Commercial Paper 38.4%
Yankee Certificates of Deposit 22.6
Corporate Bonds and Notes 18.7
Eurodollar Certificates of Deposit 11.9
Domestic Certificates of Deposit 3.3
--------------------------------------------------------
---------------------
Notes: The following notes relate to the Growth of $10,000 graph and table on
the preceding page.
* Assumes initial investment on September 1, 1990.
** Equal dollar amounts of 3-month Treasury bills are purchased at the
beginning of each of three consecutive months. As each bill matures, all
proceeds are rolled over or reinvested in a new 3-month bill. The income
used to calculate the monthly return is derived by subtracting the
original amount invested from the maturity value. The yield curve average
is the basis for calculating the return on the Index. The Index is
rebalanced monthly by market capitalization.
+ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results.
An investment in a money market fund is neither insured nor guaranteed by the US
Government. There can be no assurance that a money market fund will be able to
maintain a stable net asset value of $1.00 per share.
Annual Report 7
Report of Independent Accountants
To the Shareholders and Board of Trustees
of the SSgA Funds:
In our opinion, the accompanying statement of assets and liabilities and
statement of net assets, and the related statements of operations and of changes
in net assets and the financial highlights present fairly, in all material
respects, the financial position of SSgA Money Market Fund (the "Fund") at
August 31, 2000, the results of its operations for the fiscal year then ended
and the changes in its net assets for each of the two fiscal years in the period
then ended, and the financial highlights for each of the five fiscal years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.
Boston, Massachusetts
October 11, 2000
/s/ PricewaterhouseCoopers LLP
8 Annual Report
SSgA
Money Market Fund
Statement of Net Assets
August 31, 2000

See the accompanying notes which are an integral part of the financial
statements.
Annual Report 15
SSgA
Money Market Fund
Statement of Operations
Amounts in thousands For the Fiscal Year Ended August 31, 2000

See the accompanying notes which are an integral part of the financial
statements.
16 Annual Report
SSgA
Money Market Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Years Ended August 31,

See the accompanying notes which are an integral part of the financial
statements.
Annual Report 17
SSgA
Money Market Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

18 Annual Report
SSgA
Money Market Fund
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on one portfolio,
the SSgA Money Market Fund (the "Fund"). The Investment Company is a
registered and diversified open-end investment company, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), that was
organized as a Massachusetts business trust on October 3, 1987 and
operates under a First Amended and Restated Master Trust Agreement, dated
October 13, 1993, as amended (the "Agreement"). The Investment Company's
Agreement permits the Board of Trustees to issue an unlimited number of
full and fractional shares of beneficial interest at a $.001 par value.
2. Significant Accounting Policies
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements.
Security valuation: The Fund utilizes the amortized cost valuation method
in accordance with Rule 2a-7 of the 1940 Act, a method by which each
portfolio instrument meeting certain materiality parameters and credit
worthiness standards are initially valued at cost, and thereafter a
constant accretion/amortization to maturity of any discount or premium is
assumed.
Securities transactions: Securities transactions are recorded on the trade
date, which in most instances is the same as the settlement date. Realized
gains and losses from the securities transactions, if any, are recorded on
the basis of identified cost.
Investment income: Interest income is recorded daily on the accrual basis.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each fund's shareholders without regard to the income
and capital gains (or losses) of the other funds.
It is the Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Fund to distribute all of its taxable income. Therefore, the Fund paid
no federal income taxes and no federal income tax provision was required.
Dividends and distributions to shareholders: The Fund declares and records
dividends on net investment income daily and pays them monthly. Capital
gain distributions, if any, are generally declared and paid annually. An
additional distribution may be paid by the Fund to avoid imposition of
federal income tax on any remaining undistributed net investment income
and capital gains. The Fund may periodically make reclassifications among
certain of its capital accounts without impacting net asset value for
differences between federal tax regulations and generally accepted
accounting principles.
Expenses: Most expenses can be directly attributed to the Fund. Expenses
of the investment company which cannot be directly attributed are
allocated among all funds based principally on their relative net assets.
Annual Report 19
SSgA
Money Market Fund
Notes to Financial Statements, continued
August 31, 2000
Repurchase agreements: The Fund may engage in repurchase and tri-party
repurchase agreements with certain qualified financial institutions
whereby the Fund, through its custodian or third-party custodian, receives
delivery of the underlying securities. The market value of these
securities (including accrued interest) on acquisition date is required to
be an amount equal to at least 102% of the repurchase price. State Street
Bank and Trust Company (the "Adviser") will monitor repurchase agreements
daily to determine that the market value (including accrued interest) of
the underlying securities remains equal to at least 102% of the repurchase
price at Fedwire closing time. The Adviser or third-party custodian will
notify the seller to immediately increase the collateral on the repurchase
agreement to 102% of the repurchase price if collateral falls below 102%.
3. Securities Transactions
Investment transactions: For the year ended August 31, 2000, purchases,
sales, and maturities of investment securities, excluding US Government
and Agency obligations and repurchase agreements, for the Fund aggregated
to $379,722,879,767, $723,706,763, and $380,100,456,257, respectively.
For the year ended August 31, 2000, purchases and maturities of US
Government and Agency obligations, excluding repurchase agreements,
aggregated to $2,236,431,258 and $2,348,973,000, respectively.
4. Related Parties
Adviser: The Investment Company has an investment advisory agreement with
State Street Bank and Trust Company under which the Adviser, through State
Street Global Advisors, the investment management group of the Adviser,
directs the investments of the Fund in accordance with its investment
objectives, policies, and limitations. For these services, the Fund pays a
fee to the Adviser, calculated daily and paid monthly, at the annual rate
of .25% of its average daily net assets. The Investment Company also has
contracts with the Adviser to provide custody, shareholder servicing and
transfer agent services to the Fund. These amounts are presented in the
accompanying Statement of Operations.
In addition, the Fund has entered into arrangements with its Adviser
whereby custody credits realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's expenses. During the year, the
Fund's custodian fees were reduced by $62,143 under these arrangements.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items. The
Investment Company pays the Administrator for services supplied by the
Administrator pursuant to the Administration Agreement, an annual fee,
payable monthly on a pro rata basis. For the period September 1, 1999 to
April 30, 2000, the following percentages of the average daily net assets
of all domestic funds: $0 up to and including $500 million - .06%; over
$500 million up to and including $1 billion - .05%; over $1 billion -
.03%. Effective May 1, 2000, the annual fee is based on the following
percentages of the average daily net assets of all money market
portfolios: $0 up to $15 billion - .0315%; over $15 billion - .029%. The
Administrator will also charge a flat fee of $30,000 per year per Fund
with less than $500 million in net assets and $1,500 per year for monthly
performance reports and use of
20 Annual Report
SSgA
Money Market Fund
Notes to Financial Statements, continued
August 31, 2000
Russell Performance Universe software product. In addition, the Fund
reimburses the Administrator for out-of-pocket expenses and start-up costs
for new funds.
Distributor and Shareholder Servicing: The Investment Company has a
Distribution Agreement with Russell Fund Distributors (the "Distributor")
which is a wholly-owned subsidiary of the Administrator to promote and
offer shares of the Investment Company. The Distributor may enter into
sub-distribution agreements with other non-related parties. The amounts
paid to the Distributor are included in the accompanying Statement of
Operations.
The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the
"Plan") under the 1940 Act. Under this Plan, the Investment Company is
authorized to make payments to the Distributor, or any Shareholder
Servicing Agent, as defined in the Plan, for providing distribution and
marketing services, for furnishing assistance to investors on an ongoing
basis, and for the reimbursement of direct out-of-pocket expenses charged
by the Distributor in connection with the distribution and marketing of
shares of the Investment Company and the servicing of investor accounts.
The Fund has Shareholder Service Agreements with the Adviser, State Street
Brokerage Services, Inc. ("SSBSI"), a wholly-owned subsidiary of the
Adviser, the Adviser's Retirement Investment Services Division ("RIS"),
the Adviser's Metropolitan Division of Commercial Banking ("Commercial
Banking") and State Street Solutions ("Solutions")(collectively the
"Agents"), as well as several unaffiliated service providers. For these
services, the Fund pays .025%, .175%, .175%, .175% and .175% to the
Adviser, SSBSI, RIS, Commercial Banking, and Solutions, respectively,
based upon the average daily value of all Fund shares held by or for
customers of these Agents. For the year ended August 31, 2000, the Fund
was charged shareholder servicing expenses of $2,207,039, $578,337,
$70,528, $406,003, and $76,002, by the Adviser, SSBSI, RIS, Commercial
Banking, and Solutions, respectively.
The combined distribution and shareholder servicing payments shall not
exceed .25% of the average daily value of net assets of the Fund on an
annual basis. The shareholder servicing payments shall not exceed .20% of
the average daily value of net assets of the Fund on an annual basis.
Payments that exceed the maximum amount of allowable reimbursement may be
carried forward for two years following the year in which the expenditure
was incurred so long as the plan is in effect. The Fund's responsibility
for any such expenses carried forward shall terminate at the end of two
years following the year in which the expenditure was incurred. The
Trustees or a majority of the Fund's shareholders have the right, however,
to terminate the Distribution Plan and all payments thereunder at any
time. The Fund will not be obligated to reimburse the Distributor for
carryover expenses subsequent to the Distribution Plan's termination or
noncontinuance. There were no carryover expenses as of August 31, 2000.
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Annual Report 21
SSgA
Money Market Fund
Notes to Financial Statements, continued
August 31, 2000
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Advisory fees $1,871,910
Administration fees 222,787
Custodian fees 172,039
Distribution fees 170,380
Shareholder servicing fees 387,105
Transfer agent fees 300,863
Trustees' fees 3,581
----------
$3,128,665
==========
5. Fund Share Transactions (On a Constant Dollar Basis):

See accompanying notes which are an integral part of the financial statements.
12 Annual Report
SSgA
Matrix Equity Fund
Statement of Operations
Amounts in thousands For the Fiscal Year Ended August 31, 2000

See accompanying notes which are an integral part of the financial statements.
Annual Report 13
SSgA
Matrix Equity Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Years Ended August 31,

See accompanying notes which are an integral part of the financial statements.
14 Annual Report
SSgA
Matrix Equity Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

(a) For the periods subsequent to August 31, 1998, average month-end shares
outstanding were used for this calculation.
(b) See Note 4 for current period amounts.
Annual Report 15
SSgA
Matrix Equity Fund
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on one portfolio,
the SSgA Matrix Equity Fund (the "Fund"). The Investment Company is a
registered and diversified open-end investment company, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), that was
organized as a Massachusetts business trust on October 3, 1987 and
operates under a First Amended and Restated Master Trust Agreement, dated
October 13, 1993, as amended (the "Agreement"). The Investment Company's
Agreement permits the Board of Trustees to issue an unlimited number of
full and fractional shares of beneficial interest at a $.001 par value.
2. Significant Accounting Policies
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements.
Security valuation: United States equity securities listed and traded
principally on any national securities exchange are valued on the basis of
the last sale price or, lacking any sale, at the closing bid price, on the
primary exchange on which the security is traded. United States
over-the-counter equities are valued on the basis of the closing bid
price.
International securities traded on a national securities exchange are
valued on the basis of the last sale price. International securities
traded over the counter are valued on the basis of the mean of bid prices.
In the absence of a last sale or mean bid price, respectively, such
securities may be valued on the basis of prices provided by a pricing
service if those prices are believed to reflect the market value of such
securities.
Money market instruments maturing within 60 days of the valuation date are
valued at amortized cost.
The Fund may value securities for which market quotations are not readily
available at "fair value," as determined in good faith pursuant to
procedures established by the Board of Trustees.
Securities transactions: Securities transactions are recorded on a trade
date basis. Realized gains and losses from securities transactions are
recorded on the basis of identified cost.
Investment income: Dividend income is recorded on the ex-dividend date and
interest income is recorded daily on the accrual basis.
Amortization and accretion: All zero-coupon bond discounts and original
issue discounts are accreted for both tax and financial reporting
purposes. All short- and long-term market premiums/discounts are
amortized/accreted for both tax and financial reporting purposes.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each fund's shareholders without regard to the income
and capital gains (or losses) of the other funds.
16 Annual Report
SSgA
Matrix Equity Fund
Notes to Financial Statements, continued
August 31, 2000
It is the Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Fund to distribute all of its taxable income. Therefore, the Fund paid
no federal income taxes and no federal income tax provision was required.
The Fund's aggregate cost of investments and the composition of unrealized
appreciation and depreciation of investment securities for federal income
tax purposes as of August 31, 2000 are as follows:
Net Unrealized
Federal Tax Unrealized Unrealized Appreciation
Cost Appreciation (Depreciation) (Depreciation)
------------ ------------ -------------- --------------
$398,268,999 $33,798,734 $(11,893,468) $21,905,266
Dividends and distributions to shareholders: Income dividends and capital
gain distributions, if any, are recorded on the ex-dividend date.
Dividends are generally declared and paid quarterly. Capital gain
distributions are generally declared and paid annually. An additional
distribution may be paid by the Fund to avoid imposition of federal income
tax on any remaining undistributed net investment income and capital
gains.
The timing and characterization of certain income and capital gain
distributions are determined in accordance with federal tax regulations
which may differ from generally accepted accounting principles ("GAAP").
As a result, net investment income and net realized gain (or loss) from
investment transactions for a reporting period may differ significantly
from distributions during such period. The differences between tax
regulations and GAAP relate primarily to investments in certain securities
sold at a loss. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting
its net asset value.
Expenses: Most expenses can be directly attributed to the individual Fund.
Expenses of the investment company which cannot be directly attributed are
allocated among all funds based principally on their relative net assets.
Futures: The Fund is currently utilizing exchange-traded futures
contracts. The primary risks associated with the use of futures contracts
are an imperfect correlation between the change in market value of the
securities held by the Fund and the prices of futures contracts and the
possibility of an illiquid market. Changes in initial settlement value are
accounted for as unrealized appreciation (depreciation) until the
contracts are terminated, at which time realized gains and losses are
recognized.
3. Securities Transactions
Investment transactions: For the year ended August 31, 2000, purchases and
sales of investment securities, excluding short-term investments,
aggregated to $752,124,976 and $965,802,252, respectively.
Securities lending: The Investment Company has a securities lending
program whereby each Fund can loan securities with a value up to 33 1/3%
of its total assets to certain brokers. The Fund receives cash (U.S.
currency), U.S. Government or U.S. Government agency obligations as
collateral against the loaned securities. To the extent that a loan is
secured by cash collateral, such collateral shall be invested by State
Street Bank and Trust Company in short-term instruments, money market
mutual funds, and such other short-term investments, provided the
investments meet certain quality and diversification requirements. Under
the securities lending arrangement, the collateral received is recorded on
the Fund's statement of assets and liabilities along with the related
obligation to
Annual Report 17
SSgA
Matrix Equity Fund
Notes to Financial Statements, continued
August 31, 2000
return the collateral. In those situations where the Company has
relinquished control of securities transferred, it derecognizes the
securities and records a receivable from the counterparty.
Income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs, is
divided between the Fund and State Street Bank and Trust Company and is
recorded as interest income for the Fund. To the extent that a loan is
secured by non-cash collateral, brokers pay the Fund negotiated lenders'
fees, which are divided between the Fund and State Street Bank and Trust
Company and are recorded as interest income for the Fund. All collateral
received will be in an amount at least equal to 102% (for loans of U.S.
securities) or 105% (for non-U.S. securities) of the market value of the
loaned securities at the inception of each loan. Should the borrower of
the securities fail financially, there is a risk of delay in recovery of
the securities or loss of rights in the collateral. Consequently, loans
are made only to borrowers which are deemed to be of good financial
standing. As of August 31, 2000, the value of outstanding securities on
loan and the value of collateral amounted to $6,343,147 and $6,540,239,
respectively. Included in interest income is securities lending income of
$19,393 for the year ended August 31, 2000.
4. Related Parties
Adviser: The Investment Company has an investment advisory agreement with
State Street Bank and Trust Company (the "Adviser") under which the
Adviser, through State Street Global Advisors, the investment management
group of the Adviser, directs the investments of the Fund in accordance
with its investment objectives, policies, and limitations. For these
services, the Fund pays a fee to the Adviser, calculated daily and paid
monthly, at the annual rate of .75% of its average daily net assets. The
Adviser has voluntarily agreed to waive .125% of its advisory fee to the
Fund. As of January 1, 2000, the Adviser no longer waives a portion of its
advisory fee. The total amount of the waiver for the period September 1,
1999 to December 31, 1999 was $240,050. The Investment Company also has
contracts with the Adviser to provide custody, shareholder servicing and
transfer agent services to the Fund. These amounts are presented in the
accompanying Statement of Operations.
In addition, the Fund has entered into arrangements with its Adviser
whereby custody credits realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's expenses. During the year, the
Fund's custodian fees were reduced by $7,092 under these arrangements.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items. The
Investment Company pays the Administrator for services supplied by the
Administrator pursuant to the Administration Agreement, an annual fee,
payable monthly on a pro rata basis. For the period September 1, 1999 to
April 30, 2000, the following percentages of the average daily net assets
of all domestic funds: $0 up to and including $500 million - .06%; over
$500 million up to and including $1 billion - .05%; over $1 billion -
.03%. Effective May 1, 2000, the annual fee is based on the following
percentages of the average daily net assets of all U.S. Equity portfolios:
$0 to $2 billion - .0315%; over $2 billion - .029%. The Administrator will
charge a flat fee of $30,000 per year per Fund with less than $500 million
in net assets and $1,500 per year for monthly performance reports and use
of Russell
18 Annual Report
SSgA
Matrix Equity Fund
Notes to Financial Statements, continued
August 31, 2000
Performance Universe software product. In addition, the Fund reimburses
the Administrator for out-of-pocket expenses and start-up costs for new
funds.
Distributor and Shareholder Servicing: The Investment Company has a
Distribution Agreement with Russell Fund Distributors (the "Distributor")
which is a wholly-owned subsidiary of the Administrator to promote and
offer shares of the Investment Company. The Distributor may enter into
sub-distribution agreements with other non-related parties. The amounts
paid to the Distributor are included in the accompanying Statement of
Operations.
The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the
"Plan") under the 1940 Act. Under this Plan, the Investment Company is
authorized to make payments to the Distributor, or any Shareholder
Servicing Agent, as defined in the Plan, for providing distribution and
marketing services, for furnishing assistance to investors on an ongoing
basis, and for the reimbursement of direct out-of-pocket expenses charged
by the Distributor in connection with the distribution and marketing of
shares of the Investment Company and the servicing of investor accounts.
The Fund has Shareholder Service Agreements with the Adviser, State Street
Brokerage Services, Inc. ("SSBSI"), a wholly-owned subsidiary of the
Adviser, the Adviser's Retirement Investment Services Division ("RIS") the
Adviser's Metropolitan Division of Commercial Banking ("Commercial
Banking") and State Street Solutions ("Solutions")(collectively the
"Agents"), as well as several unaffiliated service providers. For these
services, the Fund pays .025%, .175%, .175%, .175%, and .175% to the
Adviser, SSBSI, RIS, Commercial Banking, and Solutions, respectively,
based upon the average daily value of all Fund shares held by or for
customers of these Agents. For the year ended August 31, 2000, the Fund
was charged shareholder servicing expenses of $115,215, $2,173, $98,386
and $231,759, by the Adviser, SSBSI, RIS, and Solutions, respectively. The
Fund did not incur any expenses from Commercial Banking during this year.
The combined distribution and shareholder servicing payments shall not
exceed .25% of the average daily value of net assets of the Fund on an
annual basis. The shareholder servicing payments shall not exceed .20% of
the average daily value of net assets of the Fund on an annual basis.
Payments that exceed the maximum amount of allowable reimbursement may be
carried forward for two years following the year in which the expenditure
was incurred so long as the plan is in effect. The Fund's responsibility
for any such expenses carried forward shall terminate at the end of two
years following the year in which the expenditure was incurred. The
Trustees or a majority of the Fund's shareholders have the right, however,
to terminate the Distribution Plan and all payments thereunder at any
time. The Fund will not be obligated to reimburse the Distributor for
carryover expenses subsequent to the Distribution Plan's termination or
noncontinuance. There were no carryover expenses as of August 31, 2000.
Affiliated Brokerage: The Fund placed a portion of its portfolio
transactions with SSBSI, an affiliated broker dealer of the Fund's
Adviser. The commissions paid to SSBSI were $151,786 for the year ended
August 31, 2000.
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Annual Report 19
SSgA
Matrix Equity Fund
Notes to Financial Statements, continued
August 31, 2000
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Advisory fees $257,375
Administration fees 13,676
Custodian fees 3,276
Distribution fees 3,050
Shareholder servicing fees 41,544
Transfer agent fees 6,101
Trustees' fees 2,785
--------
$327,807
========
Beneficial Interest: As of August 31, 2000, two shareholders (who were
also affiliates of the Investment Company) were record owners of
approximately 25% and 14%, respectively, of the total outstanding shares
of the Fund.
5. Fund Share Transactions (amounts in thousands)

6. Interfund Lending Program
The Fund and all other funds of the Investment Company received from the
Securities and Exchange Commission an exemptive order on December 23, 1999
to establish and operate an Interfund Credit Facility. This allows the
Funds to directly lend to and borrow money from the SSgA Money Market Fund
for temporary purposes in accordance with certain conditions. The
borrowing Funds are charged the average of the current Repo Rate and the
Bank Loan Rate. Miscellaneous Expenses on the Statement of Operations
include $33,967 of interest expense paid under the interfund lending
program.
7. Dividends
On September 1, 2000, the Board of Trustees declared a dividend of $.0059
from net investment income, payable on September 8, 2000 to shareholders
of record on September 5, 2000.
20 Annual Report
SSgA
Matrix Equity Fund
Tax Information
August 31, 2000 (Unaudited)
The Fund paid a distribution of $55,327,521 from net long-term capital
gains during its taxable year ended August 31, 2000.
Please consult a tax advisor for questions about federal or state income
tax laws.
Annual Report 21
SSgA Matrix Equity Fund
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
--------------------------------------------------------------------------------
Trustees
Lynn L. Anderson, Chairman
William L. Marshall
Steven J. Mastrovich
Patrick J. Riley
Richard D. Shirk
Bruce D. Taber
Henry W. Todd
Officers
Lynn L. Anderson, President, Treasurer and CEO
Mark E. Swanson, Treasurer and Principal Accounting Officer
J. David Griswold, Vice President and Secretary
Deedra S. Walkey, Assistant Secretary
Rick J. Chase, Assistant Treasurer
Carla L. Anderson, Assistant Secretary
Investment Adviser
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Custodian, Transfer Agent and
Office of Shareholder Inquiries
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
(800) 647-7327
Distributor
Russell Fund Distributors, Inc.
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
Administrator
Frank Russell Investment Management Company
909 A Street
Tacoma, Washington 98402
Legal Counsel
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Independent Accountants
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
22 Annual Report
[COVER GRAPHIC]
SSgA(R) funds
ANNUAL REPORT
Prime Money Market Fund
August 31, 2000
SSgA(R) Funds
Prime Money Market Fund
Annual Report
August 31, 2000
Table of Contents
Page
Chairman's Letter............................................. 4
Portfolio Management Discussion and Analysis.................. 6
Report of Independent Accountants............................. 8
Financial Statements.......................................... 9
Financial Highlights.......................................... 17
Notes to Financial Statements................................. 18
Fund Management and Service Providers......................... 22
"SSgA(R)" is a registered trademark of State Street Corporation and is licensed
for use by the SSgA Funds.
This report is prepared from the books and records of the Fund and it is
submitted for the general information of shareholders. This information is for
distribution to prospective investors only when preceded or accompanied by a
SSgA Funds Prospectus containing more complete information concerning the
investment objective and operations of the Fund, charges and expenses. The
Prospectus should be read carefully before an investment is made.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results. An investment in a money
market fund is neither insured nor guaranteed by the US government. There can be
no assurance that a money market fund will be able to maintain a stable net
asset value of $1.00 per share. Russell Fund Distributors, Inc., is the
distributor of the SSgA Funds.
SSgA Prime Money Market Fund
--------------------------------------------------------------------------------
Letter From the Chairman of State Street Global Advisors
--------------------------------------------------------------------------------
Dear Shareholders,
It is our pleasure to provide you with the SSgA Funds annual report for the
fiscal year ended August 31, 2000. The SSgA Fund Family has grown to include
twenty-four portfolios with over $21 billion in assets as of August 31, 2000.
The Fund Family provides a wide range of strategies covering the world's major
markets. The enclosed information provides an overview of the investment process
for the SSgA Prime Money Market Fund. This overview contains the portfolio
management discussion, performance updates and financial information for the
Fund.
In an ongoing effort to develop competitive products and services that provide
investment solutions for our clients, we have added the SSgA Intermediate
Municipal Bond Fund to the SSgA Fund Family. This Fund's investment objective
seeks to provide federally tax-exempt current income by investing primarily in a
diversified portfolio of municipal debt securities with a dollar-weighted
average maturity between three and ten years.
We are also pleased with the success of our SSgA Emerging Markets and SSgA
Growth and Income Funds as they were included in Money(R) Magazine's June 2000
issue listing of the 'Top 100 Mutual Funds'. This is the second year in a row
that these funds have been selected.
Additionally, the SSgA Tax Free Money Market and the SSgA Active International
Funds have achieved five-year performance history during the 2000 fiscal year.
Currently, all of our SSgA Money Market Funds have at least a five-year
performance history. We strive to meet our clients' needs by providing funds
with long-term records and competitive performance.
We would like to thank you for choosing the SSgA Funds. Our reputation is based
on our tradition of designing and delivering exceptional financial services to
our clients. We look forward to continue sharing the benefit of our experience
with you.
Sincerely,
/s/ Nicholas A. Lopardo
Nicholas A. Lopardo
State Street Global Advisors
Chairman and Chief Executive Officer
/s/ Timothy B. Harbert
Timothy B. Harbert
State Street Global Advisors
President and Chief Operating Officer, SSgA
4 Annual Report
SSgA Prime Money Market Fund
--------------------------------------------------------------------------------
Management of the Funds
--------------------------------------------------------------------------------
[PHOTO]
Nicholas A. Lopardo
Chairman and Chief Executive Officer
[PHOTO]
Timothy B. Harbert
President and Chief Operating Officer
A Team Approach to Investment Management
Our investment strategies are the product of the combined experience of our
professional staff. Portfolio Managers work together to develop and enhance the
techniques that drive our investment processes. As a result, the portfolios we
manage benefit from the knowledge of the entire team.
Ms. Lisa Hatfield, Principal, has been the portfolio manager primarily
responsible for investment decisions regarding the SSgA Prime Money Market Fund
since January 1998. Ms. Hatfield is the Unit Head of the cash desk with
responsibility for the SSgA money market funds, several short-term funds and
enhanced cash portfolios. Prior to joining SSgA, she was a portfolio manager
with State Street's Investment Research Department, where she managed the
securities lending reinvestment funds since their inception in 1987, as well as
other money market portfolios. She received a BS from Suffolk University. There
are ten other portfolio managers working with Ms. Hatfield.
Annual Report 5
SSgA Prime Money Market Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
Objective: Maximize current income while preserving capital and liquidity.
Invests in: High quality money market instruments including certificates of
deposit, time deposits, bankers acceptances, commercial paper, corporate
medium-term notes, US Government Treasury and Agency notes, and repurchase
agreements.
Strategy: Fund Managers base their decisions on the relative attractiveness of
different money market investments, which vary depending on the general level of
interest rates as well as supply and demand imbalances in the market.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Dates Prime Money Market Fund Salomon Brothers 3-Month T-Bill Index**
Inception* $10,000 $10,000
1994 $10,209 $10,200
1995 $10,803 $10,769
1996 $11,409 $11,344
1997 $12,038 $11,940
1998 $12,716 $12,564
1999 $13,362 $13,148
2000 $14,164 $13,872
================================================================================
Performance Review
The Fund had a total return of 6.00% for the fiscal year ended August 31, 2000.
This compared favorably to the Salomon Smith Barney 3-Month Treasury Bill Index
return of 5.51% for the same period. The Fund's performance is net of operating
expenses, while Index results do not include expenses of any kind. The Salomon
Smith Barney 3-Month Treasury Bill Index was chosen as a standard, well-known
representation of money market rates.
The market environment for the last year began with the Federal Open Market
Committee (FOMC) tightening monetary policy due to strong domestic growth and
rejuvenated demand from abroad. The FOMC raised rates by 25 basis points in
June, August and November 1999, bringing the Fed Funds target from 4.75% to
5.50%. The FOMC took no action at its December meeting, but followed a strategy
of injecting the economy with massive amounts of cash to ease Y2K liquidity
concerns. Fourth quarter GDP logged an impressive 8.3% due to Y2K inventory
building supported by the generous liquidity provisions from the Federal
Reserve. This surfeit of liquidity, in effect, loosened monetary policy
--------------------------------------------------------------------------------
SSgA Prime Money Market Fund
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
-------------- ------------ -------
1 Year $ 10,600 6.00%
5 Years $ 13,110 5.57%+
Inception $ 14,164 5.48%+
--------------------------------------------------------------------------------
Salomon Smith Barney 3-Month Treasury Bill Index
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
-------------- ------------ -------
1 Year $ 10,551 5.51%
5 Years $ 12,882 5.20%+
Inception $ 13,872 5.16%+
See related Notes on following page.
6 Annual Report
SSgA Prime Money Market Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
when in fact tight labor markets and excess demand called for tightening.
First quarter 2000 GDP followed with a 4.8% growth rate. To achieve a more
sustainable rate of growth, the Federal Reserve Board needed to take back the
excess liquidity and slow the economy. The FOMC did so by raising interest rates
by 100 basis points in the first half of 2000. Although GDP advanced 5.4%
throughout the second quarter of 2000, fears of inflation were tempered by the
fact that productivity grew at 5% for the same period. The FOMC opted to leave
rates unchanged at the June and August meetings while maintaining a cautious
stance going forward. The Manager continues to be cautious about future FOMC
policy, considering the trend in rising oil prices as well as the upcoming
presidential election.
Market and Portfolio Highlights
In the last fiscal year, the SSgA Prime Money Market Fund was managed
consistently with its objective of providing safety of principal and liquidity
by investing in high quality investments and providing competitive returns. The
Fund's net assets increased in size by $1.5 billion or 62% over the past year to
$4.0 billion at August 31, 2000.
During the fall tightening period the Fund was managed with liquidity as a
primary concern, with maturing positions remaining in cash and very liquid
short-term securities throughout the last calendar quarter of 1999. This large
cash position served to hedge against Y2K liquidity concerns and helped with the
substantial swings in assets related to calendar year-end 1999. The 100 basis
points of tightening in the first half of 2000, combined with the market's
concern of further tightening, resulted in a very steep yield curve, with the
6-month LIBOR at 7.10% and the 12-month LIBOR at 7.50%. At that time the market
was expecting up to 100 basis points of additional tightening. The Fund took the
opportunity to buy on market weakness and extended the Fund's average maturity.
By the end of August, the yield curve had stabilized with the 3-month LIBOR at
6.67%, the 6-month LIBOR at 6.80% and the 12-month LIBOR at 6.92%. The Fund's
average maturity ranged from 41 to 60 days over the last year, ending at 60 days
at August 31, 2000, longer than its peer group average of 51 days as measured by
iMoneyNet, Inc. (formerly IBC Financial Data).
The Fund increased exposure in fixed rate securities from 65% at August 31, 1999
to 81.5% on August 31, 2000. Fixed rate securities were selected over floating
rate securities enabling the Fund to add yield in a rising rate environment. The
Fund also increased exposure in 1- to 3-month asset-backed commercial paper
which was priced 2 to 5 basis points cheaper than corresponding maturity bank
and finance commercial paper. With the yield curve's potential to steepen on
negative inflation news, the Manager will look for those opportunities to extend
duration and add yield.
-------------------------------------------------------------
Top Five Holdings (by investment type,
as a percent of Total Investments) August 31, 2000
-------------------------------------------------------------
Domestic Commercial Paper 37.8%
Corporate Bonds and Notes 19.1
Eurodollar Certificates of Deposit 13.9
Yankee Certificates of Deposit 13.8
Domestic Certificates of Deposit 6.6
-------------------------------------------------------------
---------------------
Notes: The following notes relate to the Growth of $10,000 graph and table on
the preceding page.
* The Fund commenced operations on February 22, 1994. Index comparison began
March 1, 1994.
** Equal dollar amounts of 3-month Treasury bills are purchased at the
beginning of each of three consecutive months. As each bill matures, all
proceeds are rolled over or reinvested in a new 3-month bill. The income
used to calculate the monthly return is derived by subtracting the
original amount invested from the maturity value. The yield curve average
is the basis for calculating the return on the Index. The Index is
rebalanced monthly by market capitalization.
+ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results.
An investment in a money market fund is neither insured nor guaranteed by the US
Government. There can be no assurance that a money market fund will be able to
maintain a stable net asset value of $1.00 per share.
Annual Report 7
Report of Independent Accountants
To the Shareholders and Board of Trustees of the SSgA Funds:
In our opinion, the accompanying statement of assets and liabilities and
statement of net assets, and the related statements of operations and of changes
in net assets and the financial highlights present fairly, in all material
respects, the financial position of SSgA Prime Money Market Fund (the "Fund") at
August 31, 2000, the results of its operations for the fiscal year then ended
and the changes in its net assets for each of the two fiscal years in the period
then ended, and the financial highlights for each of the five fiscal years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.
Boston, Massachusetts
October 11, 2000
/s/ PricewaterhouseCoopers LLP
8 Annual Report
SSgA
Prime Money Market Fund
Statement of Net Assets
August 31, 2000

* The interest rate for all securities with a maturity greater than thirteen
months has an automatic reset feature resulting in an effective maturity
of thirteen months or less.
(a) Adjustable or floating rate security.
(b) The identified cost for federal income tax purpose is the same as shown
above.
See accompanying notes which are an integral part of the financial statements.
Annual Report 13
SSgA
Prime Money Market Fund
Statement of Assets and Liabilities
Amounts in thousands (except per share amount) August 31, 2000

See accompanying notes which are an integral part of the financial statements.
16 Annual Report
SSgA
Prime Money Market Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

See accompanying notes which are an integral part of the financial statements.
16 Annual Report
SSgA
Small Cap Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

(a) For the periods subsequent to August 31, 1998, average month-end shares
outstanding were used for this calculation.
Annual Report 17
SSgA
Small Cap Fund
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on one portfolio,
the SSgA Small Cap Fund (the "Fund"). The Investment Company is a
registered and diversified open-end investment company, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), that was
organized as a Massachusetts business trust on October 3, 1987 and
operates under a First Amended and Restated Master Trust Agreement, dated
October 13, 1993, as amended (the "Agreement"). The Investment Company's
Agreement permits the Board of Trustees to issue an unlimited number of
full and fractional shares of beneficial interest at a $.001 par value.
2. Significant Accounting Policies
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements.
Security valuation: United States equity securities listed and traded
principally on any national securities exchange are valued on the basis of
the last sale price or, lacking any sale, at the closing bid price, on the
primary exchange on which the security is traded. United States
over-the-counter equities are valued on the basis of the closing bid
price.
International securities traded on a national securities exchange are
valued on the basis of the last sale price. International securities
traded over the counter are valued on the basis of the mean of bid prices.
In the absence of a last sale or mean bid price, respectively, such
securities may be valued on the basis of prices provided by a pricing
service if those prices are believed to reflect the market value of such
securities.
Money market instruments maturing within 60 days of the valuation date are
valued at amortized cost.
The Fund may value securities for which market quotations are not readily
available at "fair value," as determined in good faith pursuant to
procedures established by the Board of Trustees.
Securities transactions: Securities transactions are recorded on a trade
date basis. Realized gains and losses from securities transactions are
recorded on the basis of identified cost.
Investment income: Dividend income is recorded on the ex-dividend date and
interest income is recorded daily on the accrual basis.
Amortization and accretion: All zero-coupon bond discounts and original
issue discounts are accreted for both tax and financial reporting
purposes. All short- and long-term market premiums/discounts are
amortized/accreted for both tax and financial reporting purposes.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each fund's shareholders without regard to the income
and capital gains (or losses) of the other funds.
18 Annual Report
SSgA
Small Cap Fund
Notes to Financial Statements, continued
August 31, 2000
It is the Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Fund to distribute all of its taxable income. Therefore, the Fund paid
no federal income taxes and no federal income tax provision was required.
At August 31, 2000, the Fund had a net tax basis capital loss carryover of
$8,981,463 which may be applied against any realized net taxable gains in
each succeeding year or until its expiration date of August 31, 2007. As
permitted by tax regulations, the Fund intends to defer a net realized
capital loss of $8,659,636 incurred from November 1, 1999 to August 31,
2000, and treat it as arising in the fiscal year 2001.
The Fund's aggregate cost of investments and the composition of unrealized
appreciation and depreciation of investment securities for federal income
tax purposes as of August 31, 2000 are as follows:
Net
Unrealized
Federal Tax Unrealized Unrealized Appreciation
Cost Appreciation (Depreciation) (Depreciation)
------------ ------------ -------------- --------------
$324,310,480 $ 58,155,465 $ (21,287,789) $ 36,867,676
Dividends and distributions to shareholders: Income dividends and capital
gain distributions, if any, are recorded on the ex-dividend date.
Dividends are generally declared and paid quarterly. Capital gain
distributions are generally declared and paid annually. An additional
distribution may be paid by the Fund to avoid imposition of federal income
tax on any remaining undistributed net investment income and capital
gains.
The timing and characterization of certain income and capital gain
distributions are determined in accordance with federal tax regulations
which may differ from generally accepted accounting principles ("GAAP").
As a result, net investment income and net realized gain (or loss) on
investment transactions for a reporting year may differ significantly from
distributions during such year. The differences between tax regulations
and GAAP relate primarily to investments in futures and certain securities
sold at a loss. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting
its net asset value.
Expenses: Most expenses can be directly attributed to the Fund. Expenses
of the investment company which cannot be directly attributed are
allocated among all funds based principally on their relative net assets.
Futures: The Fund utilizes exchange-traded futures contracts. The primary
risks associated with the use of futures contracts are an imperfect
correlation between the change in market value of the securities held by
the Fund and the prices of futures contracts and the possibility of an
illiquid market. Changes in initial settlement value are accounted for as
unrealized appreciation (depreciation) until the contracts are terminated,
at which time realized gains and losses are recognized.
3. Securities Transactions
Investment transactions: For the year ended August 31, 2000, purchases and
sales of investment securities, excluding short-term investments and
futures contracts, aggregated to $517,064,833 and $595,690,375,
respectively.
Annual Report 19
SSgA
Small Cap Fund
Notes to Financial Statements, continued
August 31, 2000
Securities lending: The Investment Company has a securities lending
program whereby each Fund can loan securities with a value up to 33 1/3%
of its total assets to certain brokers. The Fund receives cash (U.S.
currency), U.S. Government or U.S. Government agency obligations as
collateral against the loaned securities. To the extent that a loan is
secured by cash collateral, such collateral shall be invested by State
Street Bank and Trust Company in short-term instruments, money market
mutual funds, and such other short-term investments, provided the
investments meet certain quality and diversification requirements. Under
the securities lending arrangement, the collateral received is recorded on
the Fund's statement of assets and liabilities along with the related
obligation to return the collateral. In those situations where the Company
has relinquished control of securities transferred, it derecognizes the
securities and records a receivable from the counterparty.
Income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs, is
divided between the Fund and State Street Bank and Trust Company and is
recorded as interest income for the Fund. To the extent that a loan is
secured by non-cash collateral, brokers pay the Fund negotiated lenders'
fees, which are divided between the Fund and State Street Bank and Trust
Company and are recorded as interest income for the Fund. All collateral
received will be in an amount at least equal to 102% (for loans of U.S.
securities) or 105% (for non-U.S. securities) of the market value of the
loaned securities at the inception of each loan. Should the borrower of
the securities fail financially, there is a risk of delay in recovery of
the securities or loss of rights in the collateral. Consequently, loans
are made only to borrowers which are deemed to be of good financial
standing. As of August 31, 2000, the value of outstanding securities on
loan and the value of collateral amounted to $39,575,061 and $41,055,048,
respectively. Included in interest income is securities lending income of
$145,510 for the year ended August 31, 2000.
4. Related Parties
Adviser: The Investment Company has an investment advisory agreement with
State Street Bank and Trust Company (the "Adviser") under which the
Adviser, through State Global Advisors, the investment management group of
the Adviser, directs the investments of the Fund in accordance with its
investment objectives, policies, and limitations. For these services, the
Fund pays a fee to the Adviser calculated daily and paid monthly, at an
annual rate of .75% of its average daily net assets. The Investment
Company also has contracts with the Adviser to provide custody,
shareholder servicing and transfer agent services to the Fund. These
amounts are presented in the accompanying Statement of Operations.
In addition, the Fund has entered into arrangements with its Adviser
whereby custody credits realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's expenses. During the year, the
Fund's custodian fees were reduced by $6,871 under these arrangements.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items.
20 Annual Report
SSgA
Small Cap Fund
Notes to Financial Statements, continued
August 31, 2000
The Investment Company pays the Administrator for services supplied by the
Administrator pursuant to the Administration Agreement, an annual fee,
payable monthly on a pro rata basis. For the period September 1, 1999 to
April 30, 2000, the following percentages of the combined average daily
net assets of all domestic funds: $0 up to and including $500 million -
.06%; over $500 million up to and including $1 billion - .05%; over $1
billion - .03%. Effective May 1, 2000, the annual fee is based on the
following percentages of the average daily net assets of all U.S. Equity
portfolios: $0 to $2 billion - .0315%; over $2 billion - .029%. The
Administrator will charge a flat fee of $30,000 per year per Fund with
less than $500 million in net assets and $1,500 per year for monthly
performance reports and use of Russell Performance Universe software
product. In addition, the Fund reimburses the Administrator for
out-of-pocket expenses and start-up costs for new funds.
Distributor and Shareholder Servicing: The Investment Company has a
Distribution Agreement with Russell Fund Distributors (the "Distributor")
which is a wholly-owned subsidiary of the Administrator to promote and
offer shares of the Investment Company. The Distributor may enter into
sub-distribution agreements with other non-related parties. The amounts
paid to the Distributor are included in the accompanying Statement of
Operations.
The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the
"Plan") under the 1940 Act. Under this Plan, the Investment Company is
authorized to make payments to the Distributor, or any Shareholder
Servicing Agent, as defined in the Plan, for providing distribution and
marketing services, for furnishing assistance to investors on an ongoing
basis, and for the reimbursement of direct out-of-pocket expenses charged
by the Distributor in connection with the distribution and marketing of
shares of the Investment Company and the servicing of investor accounts.
The Fund has Shareholder Service Agreements with the Adviser, State Street
Brokerage Services, Inc. ("SSBSI"), a wholly-owned subsidiary of the
Adviser, the Adviser's Retirement Investment Services Division ("RIS"),
the Adviser's Metropolitan Division of Commercial Banking ("Commercial
Banking") and State Street Solutions ("Solutions")(collectively the
"Agents"), as well as several unaffiliated service providers. For these
services, the Fund pays .025%, .175%, .175%, .175% and .175% to the
Adviser, SSBSI, RIS, Commercial Banking, and Solutions, respectively,
based upon the average daily value of all Fund shares held by or for
customers of these Agents. For the year ended August 31, 2000, the Fund
was charged shareholder servicing expenses of $80,911, $5,387, $236,711,
$325 and $55,911, by the Adviser, SSBSI, RIS, Commercial Banking, and
Solutions, respectively.
The combined distribution and shareholder servicing payments shall not
exceed .25% of the average daily value of net assets of the Fund on an
annual basis. The shareholder servicing payments shall not exceed .20% of
the average daily value of net assets of the Fund on an annual basis.
Payments that exceed the maximum amount of allowable reimbursement may be
carried forward for two years following the year in which the expenditure
was incurred so long as the plan is in effect. The Fund's responsibility
for any such expenses carried forward shall terminate at the end of two
years following the year in which the expenditure was incurred. The
Trustees or a majority of the Fund's shareholders have the right, however,
to terminate the Distribution Plan and all payments thereunder at any
time. The Fund will not be obligated to reimburse the Distributor for
carryover expenses subsequent to the Distribution Plan's termination or
noncontinuance. There were no carryover expenses as of August 31, 2000.
Annual Report 21
SSgA
Small Cap Fund
Notes to Financial Statements, continued
August 31, 2000
Affiliated Brokerage: The Fund placed a portion of its portfolio
transactions with SSBSI, an affiliated broker dealer of the Fund's
Adviser. The commissions paid to SSBSI were $13,365 for the year ended
August 31, 2000.
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Advisory fees $216,415
Administration fees 13,562
Custodian fees 16,561
Distribution fees 9,436
Shareholder servicing fees 71,584
Transfer agent fees 34,336
Trustees' fees 1,534
--------
$363,428
========
Beneficial Interest: As of August 31, 2000, one shareholder was a record
owner of approximately 29% of the total outstanding shares of the Fund.
5. Fund Share Transactions (amounts in thousands)
Fiscal Years Ended August 31,
------------------------------------------
2000 1999
------------------- -------------------
Shares Dollars Shares Dollars
------- --------- ------- ---------
Proceeds from shares sold 10,079 $ 203,755 20,403 $ 358,555
Proceeds from reinvestment
of distributions 11 180 23 405
Payments for shares redeemed (14,067) (278,458) (22,182) (387,698)
------- --------- ------- ---------
Total net increase (decrease) (3,977) $ (74,523) (1,756) $ (28,738)
======= ========= ======= =========
6. Interfund Lending Program
The Fund and all other funds of the Investment Company received from the
Securities and Exchange Commission an exemptive order on December 23, 1999
to establish and operate an Interfund Credit Facility. This allows the
Funds to directly lend to and borrow money from the SSgA Money Market Fund
for temporary purposes in accordance with certain conditions. The
borrowing Funds are charged the average of the current Repo Rate and the
Bank Loan Rate. Miscellaneous Expenses on the Statement of Operations
include $3,578 of interest paid under the interfund lending program.
22 Annual Report
SSgA Small Cap Fund
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
--------------------------------------------------------------------------------
Trustees
Lynn L. Anderson, Chairman
William L. Marshall
Steven J. Mastrovich
Patrick J. Riley
Richard D. Shirk
Bruce D. Taber
Henry W. Todd
Officers
Lynn L. Anderson, President, Treasurer and CEO
Mark E. Swanson, Treasurer and Principal Accounting Officer
J. David Griswold, Vice President and Secretary
Deedra S. Walkey, Assistant Secretary
Rick J. Chase, Assistant Treasurer
Carla L. Anderson, Assistant Secretary
Investment Adviser
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Custodian, Transfer Agent and
Office of Shareholder Inquiries
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
(800) 647-7327
Distributor
Russell Fund Distributors, Inc.
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
Administrator
Frank Russell Investment Management Company
909 A Street
Tacoma, Washington 98402
Legal Counsel
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Independent Accountants
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
Annual Report 23
[COVER GRAPHIC]
SSgA(R) funds
ANNUAL REPORT
US Treasury Money Market Fund
August 31, 2000
SSgA(R) Funds
US Treasury Money Market Fund
Annual Report
August 31, 2000
Table of Contents
Page
Chairman's Letter........................................................... 4
Portfolio Management Discussion and Analysis................................ 6
Report of Independent Accountants........................................... 8
Financial Statements........................................................ 9
Financial Highlights........................................................ 14
Notes to Financial Statements............................................... 15
Fund Management and Service Providers....................................... 19
"SSgA(R)" is a registered trademark of State Street Corporation and is licensed
for use by the SSgA Funds.
This report is prepared from the books and records of the Fund and it is
submitted for the general information of shareholders. This information is for
distribution to prospective investors only when preceded or accompanied by a
SSgA Funds Prospectus containing more complete information concerning the
investment objective and operations of the Fund, charges and expenses. The
Prospectus should be read carefully before an investment is made.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results. An investment in a money
market fund is neither insured nor guaranteed by the US government. There can be
no assurance that a money market fund will be able to maintain a stable net
asset value of $1.00 per share. Russell Fund Distributors, Inc., is the
distributor of the SSgA Funds.
SSgA US Treasury Money Market Fund
--------------------------------------------------------------------------------
Letter From the Chairman of State Street Global Advisors
--------------------------------------------------------------------------------
Dear Shareholders,
It is our pleasure to provide you with the SSgA Funds annual report for the
fiscal year ended August 31, 2000. The SSgA Fund Family has grown to include
twenty-four portfolios with over $21 billion in assets as of August 31, 2000.
The Fund Family provides a wide range of strategies covering the world's major
markets. The enclosed information provides an overview of the investment process
for the SSgA US Treasury Money Market Fund. This overview contains the portfolio
management discussion, performance updates and financial information for the
Fund.
In an ongoing effort to develop competitive products and services that provide
investment solutions for our clients, we have added the SSgA Intermediate
Municipal Bond Fund to the SSgA Fund Family. This Fund's investment objective
seeks to provide federally tax-exempt current income by investing primarily in a
diversified portfolio of municipal debt securities with a dollar-weighted
average maturity between three and ten years.
We are also pleased with the success of our SSgA Emerging Markets and SSgA
Growth and Income Funds as they were included in Money(R) Magazine's June 2000
issue listing of the 'Top 100 Mutual Funds'. This is the second year in a row
that these funds have been selected.
Additionally, the SSgA Tax Free Money Market and the SSgA Active International
Funds have achieved five-year performance history during the 2000 fiscal year.
Currently, all of our SSgA Money Market Funds have at least a five-year
performance history. We strive to meet our clients' needs by providing funds
with long-term records and competitive performance.
We would like to thank you for choosing the SSgA Funds. Our reputation is based
on our tradition of designing and delivering exceptional financial services to
our clients. We look forward to continue sharing the benefit of our experience
with you.
Sincerely,
/s/ Nicholas A. Lopardo
Nicholas A. Lopardo
State Street Global Advisors
Chairman and Chief Executive Officer
/s/ Timothy B. Harbert
Timothy B. Harbert
State Street Global Advisors
President and Chief Operating Officer, SSgA
4 Annual Report
SSgA US Treasury Money Market Fund
--------------------------------------------------------------------------------
Management of the Funds
--------------------------------------------------------------------------------
[PHOTO]
Nicholas A. Lopardo
Chairman and Chief Executive Officer
[PHOTO]
Timothy B. Harbert
President and Chief Operating Officer
A Team Approach to Investment Management
Our investment strategies are the product of the combined experience of our
professional staff. Portfolio Managers work together to develop and enhance the
techniques that drive our investment processes. As a result, the portfolios we
manage benefit from the knowledge of the entire team.
Ms. Lisa Hatfield, Principal, has been the portfolio manager primarily
responsible for investment decisions regarding the SSgA US Treasury Money Market
Fund since March 1999. Ms. Hatfield is the Unit Head of the cash desk with
responsibility for the SSgA money market funds, several short-term funds and
enhanced cash portfolios. Prior to joining SSgA, she was a portfolio manager
with State Street's Investment Research Department, where she managed the
securities lending reinvestment funds since their inception in 1987, as well as
other money market portfolios. She received a BS from Suffolk University. There
are ten other portfolio managers working with Ms. Hatfield.
Annual Report 5
SSgA US Treasury Money Market Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
Objective: Maximize current income while preserving capital and liquidity.
Invests in: US Treasury notes and bills, and repurchase agreements backed by
those securities.
Strategy: Fund Managers base their decisions on the relative attractiveness of
different money market investments, which vary depending on the general level of
interest rates as well as supply and demand imbalances in the market.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Salomon Smith Barney
Dates US Treasury Money Market Fund 3-Month Treasury Bill Index**
Inception* $10,000 $10,000
1994 $10,251 $10,277
1995 $10,813 $10,851
1996 $11,399 $11,431
1997 $12,010 $12,031
1998 $12,675 $12,659
1999 $13,288 $13,248
2000 $14,039 $13,978
================================================================================
Performance Review
The Fund had a total return of 5.65% for the fiscal year ended August 31, 2000.
This compared favorably to the Salomon Smith Barney 3-Month Treasury Bill Index,
which returned 5.51% for the same period. The Fund's performance is net of
operating expenses, while Index results do not include expenses of any kind. The
Salomon Smith Barney 3-Month Treasury Bill Index was chosen as a standard,
well-known representation of money market rates.
The market environment for the last year began with the Federal Open Market
Committee (FOMC) tightening monetary policy due to strong domestic growth and
rejuvenated demand from abroad. The FOMC raised rates by 25 basis points in
June, August and November 1999, bringing the Fed Funds target from 4.75% to
5.50%. The FOMC took no action at its December meeting, but followed a strategy
of injecting the economy with massive amounts of cash to ease
--------------------------------------------------------------------------------
SSgA US Treasury Money Market Fund
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
------------------- --------------- --------
1 Year $ 10,565 5.65%
5 Years $ 12,983 5.36%+
Inception $ 14,039 5.15%+
--------------------------------------------------------------------------------
Salomon Smith Barney 3-Month Treasury Bill Index
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
------------------- --------------- --------
1 Year $ 10,551 5.51%
5 Years $ 12,882 5.20%+
Inception $ 13,978 5.09%+
See related Notes on following page.
6 Annual Report
SSgA US Treasury Money Market Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
Y2K liquidity concerns. Fourth quarter GDP logged an impressive 8.3% due to Y2K
inventory building supported by the generous liquidity provisions from the
Federal Reserve. This surfeit of liquidity, in effect, loosened monetary policy
when in fact tight labor markets and excess demand called for tightening.
First quarter 2000 GDP followed with a 4.8% growth rate. To achieve a more
sustainable rate of growth, the Federal Reserve Board needed to take back the
excess liquidity and slow the economy. The FOMC did so by raising interest rates
by 100 basis points in the first half of 2000. Although GDP advanced 5.4%
throughout the second quarter of 2000, fears of inflation were tempered by the
fact that productivity grew at 5% for the same period. The FOMC opted to leave
rates unchanged at the June and August meetings while maintaining a cautious
stance going forward. The Manager continues to be cautious about future FOMC
policy, considering the trend in rising oil prices as well as the upcoming
presidential election.
Market and Portfolio Highlights
In the last fiscal year, the SSgA US Treasury Money Market Fund was managed
consistently with its objective of providing safety of principal and liquidity
by investing in treasury securities and providing competitive returns. The
Fund's net assets increased slightly in size by $15 million over the past year
to $1.1 billion at August 31, 2000.
During the fall tightening period the Fund was managed with liquidity as a
primary concern, with maturing positions remaining in cash and very liquid
short-term securities throughout the last calendar quarter of 1999. This large
cash position served to hedge against Y2K liquidity concerns and helped with the
substantial swings in assets related to calendar year-end 1999. Perceived as a
"safe haven", Treasury securities traded very expensively throughout the
tightening period and year end, as investors parked cash in the safety of the
short Treasury market. Short dated Treasury yields continued to drop as the
Treasury reduced the size of bill auctions causing a supply and demand
imbalance. Throughout the period, overnight repurchase agreements significantly
outyielded Treasury bills and notes. Consequently, as Treasury bills and notes
in the Fund matured, the money was largely reinvested into repos, taking
advantage of yields that are priced close to the Fed funds target. Issuance of
short term cash management bills provided some Treasury supply priced at
attractive levels. In this environment, the Fund's average days to maturity
steadily declined, from 39 days at the beginning of the fiscal year, to 8 days
at August 31, 2000, with over 68% of the Fund invested in overnight maturities.
With the yield curve's potential to steepen on negative inflation news, the
Manager will look for those opportunities to extend duration and add yield.
----------
Notes: The following notes relate to the Growth of $10,000 graph and table on
the preceding page.
* The Fund commenced operations on December 1, 1993. Index comparison also
began on December 1, 1993.
** Equal dollar amounts of 3-month Treasury bills are purchased at the
beginning of each of three consecutive months. As each bill matures, all
proceeds are rolled over or reinvested in a new 3-month bill. The income
used to calculate the monthly return is derived by subtracting the
original amount invested from the maturity value. The yield curve average
is the basis for calculating the return on the Index. The Index is
rebalanced monthly by market capitalization.
+ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results.
An investment in a money market fund is neither insured nor guaranteed by the US
Government. There can be no assurance that a money market fund will be able to
maintain a stable net asset value of $1.00 per share.
Annual Report 7
Report of Independent Accountants
To the Shareholders and Board of Trustees
of the SSgA Funds:
In our opinion, the accompanying statement of assets and liabilities and
statement of net assets, and the related statements of operations and of changes
in net assets and the financial highlights present fairly, in all material
respects, the financial position of SSgA US Treasury Money Market Fund (the
"Fund") at August 31, 2000, the results of its operations for the fiscal year
then ended and the changes in its net assets for each of the two fiscal years in
the period then ended, and the financial highlights for each of the five fiscal
years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.
Boston, Massachusetts
October 11, 2000
/s/ PricewaterhouseCoopers LLP
8 Annual Report
SSgA
US Treasury Money Market Fund
Statement of Net Assets
August 31, 2000

Principal
Amount Date Value
(000) Rate of (000)
$ % Maturity $
--------- ----- -------- -------
United States Government - 31.9%
United States Treasury Bills 200,000 6.340 09/21/00 199,295
United States Treasury Bills 100,000 6.395 09/21/00 99,645
United States Treasury Bills 50,000 6.130 09/28/00 49,776
---------
Total United States Government (cost $348,716) 348,716
---------
Total Investments - 31.9% (amortized cost $348,716) 348,716
---------
Repurchase Agreements - 68.6%
Agreement with ABN AMRO Securities (USA) Inc. of $50,000 acquired August 31,
2000 at 6.600% to be repurchased at $50,009 on September 1, 2000,
collateralized by:
$50,032 various United States Treasury Obligations valued at $51,057 50,000
Agreement with Bank One Capital Corp. and Chase Bank (Tri-Party) of $50,000
acquired August 31, 2000 at 6.600% to be repurchased at $50,009 on September
1, 2000, collateralized by:
$50,955 various United States Treasury Obligations valued at $51,003 50,000
Agreement with Bear Stearns & Co., Inc. of $250,000
acquired August 31, 2000 at 6.620% to be repurchased at $250,046 on
September 1, 2000, collateralized by:
$414,748 various United States Treasury Strips valued at $255,328 250,000
Agreement with Deutsche Bank of $50,000
acquired August 31, 2000 at 6.610% to be repurchased at $50,009 on September
1, 2000, collateralized by:
$45,350 various United States Treasury Obligations valued at $51,483 50,000
Agreement with Lehman Brothers, Inc. of $51,210
acquired August 31, 2000 at 6.600% to be repurchased at $51,219 on September
1, 2000, collateralized by:
$49,630 various United States Treasury Obligations valued at $52,331 51,210
Agreement with Merrill Lynch, Pierce, Fenner & Smith, Inc. of $50,000
acquired August 31, 2000 at 6.600% to be repurchased at $50,009 on September
1, 2000, collateralized by:
$49,395 various United States Treasury Obligations valued at $51,002 50,000

(a) The identified cost for federal income tax purposes is the same as shown
above.
See accompanying notes which are an integral part of the financial statements.
10 Annual Report
SSgA
US Treasury Money Market Fund
Statement of Assets and Liabilities
Amounts in thousands (except per share amount) August 31, 2000

See accompanying notes which are an integral part of the financial statements.
Annual Report 13
SSgA
US Treasury Money Market Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

(a) See Note 4 for current period amounts.
14 Annual Report
SSgA
US Treasury Money Market Fund
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on one portfolio,
the SSgA US Treasury Money Market Fund (the "Fund"). The Investment
Company is a registered and diversified open-end investment company, as
defined in the Investment Company Act of 1940, as amended (the "1940
Act"), that was organized as a Massachusetts business trust on October 3,
1987 and operates under a First Amended and Restated Master Trust
Agreement, dated October 13, 1993, as amended (the "Agreement"). The
Investment Company's Agreement permits the Board of Trustees to issue an
unlimited number of full and fractional shares of beneficial interest at a
$.001 par value.
2. Significant Accounting Policies
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements.
Security valuation: The Fund utilizes the amortized cost valuation method
in accordance with Rule 2a-7 of the 1940 Act, a method by which each
portfolio instrument meeting certain materiality parameters and credit
worthiness standards are initially valued at cost, and thereafter a
constant accretion/amortization to maturity of any discount or premium is
assumed.
Securities transactions: Securities transactions are recorded on the trade
date, which in most instances is the same as the settlement date. Realized
gains and losses from the securities transactions, if any, are recorded on
the basis of identified cost.
Investment income: Interest income is recorded daily on the accrual basis.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each funds' shareholders without regard to the income
and capital gains (or losses) of the other funds.
It is the Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Fund to distribute all of its taxable income. Therefore, the Fund paid
no federal income taxes and no federal income tax provision was required.
Dividends and distributions to shareholders: The Fund declares and records
dividends on net investment income daily and pays them monthly. Capital
gain distributions, if any, are generally declared and paid annually. An
additional distribution may be paid by the Fund to avoid imposition of
federal income tax on any remaining undistributed net investment income
and capital gains. The Fund may periodically make reclassifications among
certain of its capital accounts without impacting net asset value for
differences between federal tax regulations and generally accepted
accounting principles.
Expenses: Most expenses can be directly attributed to the Fund. Expenses
of the investment company which cannot be directly attributed are
allocated among all funds based principally on their relative net assets.
Annual Report 15
SSgA
US Treasury Money Market Fund
Notes to Financial Statements, continued
August 31, 2000
Repurchase agreements: The Fund may engage in repurchase and tri-party
repurchase agreements with certain qualified financial institutions
whereby the Fund, through its custodian or third-party custodian, receives
delivery of the underlying securities. The market value of these
securities (including accrued interest) on acquisition date is required to
be an amount equal to at least 102% of the repurchase price. State Street
Bank and Trust Company (the "Adviser") will monitor repurchase agreements
daily to determine that the market value (including accrued interest) of
the underlying securities remains equal to at least 102% of the repurchase
price at Fedwire closing time. The Adviser or third-party custodian will
notify the seller to immediately increase the collateral on the repurchase
agreement to 102% of the repurchase price if collateral falls below 102%.
3. Securities Transactions
Investment transactions: For the year ended August 31, 2000, purchases,
sales and maturities of US Government and Agency obligations, excluding
repurchase agreements aggregated to $2,369,938,597, $722,031,674 and
$1,830,000,000, respectively.
4. Related Parties
Adviser: The Investment Company has an investment advisory agreement with
State Street Bank and Trust Company under which the Adviser, through State
Street Global Advisors, the investment management group of the Adviser,
directs the investments of the Fund in accordance with its investment
objectives, policies, and limitations. For these services, the Fund pays a
fee to the Adviser, calculated daily and paid monthly, at the annual rate
of .25% of its average daily net assets. The Adviser has voluntarily
agreed to waive .15% of its .25% advisory fee. The Adviser has also
voluntarily agreed to reimburse the Fund for all expenses in excess of
.20% of its average daily net assets on an annual basis. The total amounts
of the waiver and reimbursement for the year ended August 31, 2000 were
$1,045,420 and $827,844, respectively. As of August 31, 2000, the
receivable due from the Adviser for reimbursed expenses in excess of the
expense cap has been netted against the Advisory fee payable. The
Investment Company also has contracts with the Adviser to provide custody,
shareholder servicing and transfer agent services to the Fund. These
amounts are presented in the accompanying Statement of Operations.
In addition, the Fund has entered into arrangements with its Adviser
whereby custody credits realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's expenses. During the year, the
Fund's custodian fees were reduced by $17,734 under these arrangements.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items. The
Investment Company pays the Administrator for services supplied by the
Administrator pursuant to the Administration Agreement, an annual fee,
payable monthly on a pro rata basis. For the period September 1, 1999 to
April 30, 2000, the following percentages of the average daily net assets
of all domestic funds: $0 up to and including $500 million - .06%; over
$500 million up to and including $1 billion - .05%; over $1 billion -
.03%. Effective May 1, 2000, the annual fee is based on the following
percentages of the average daily net assets of all money market
portfolios: $0 up to $15 billion - .0315%; over $15 billion - .029%. The
Administrator will also charge a flat fee of $30,000 per year per Fund
with less than $500 million in net assets and $1,500 per year for monthly
performance reports and use of
16 Annual Report
SSgA
US Treasury Money Market Fund
Notes to Financial Statements, continued
August 31, 2000
Russell Performance Universe software product. In addition, the Fund
reimburses the Administrator for out-of-pocket expenses and start-up costs
for new funds.
Distributor and Shareholder Servicing: The Investment Company has a
Distribution Agreement with Russell Fund Distributors (the "Distributor")
which is a wholly-owned subsidiary of the Administrator to promote and
offer shares of the Investment Company. The Distributor may enter into
sub-distribution agreements with other non-related parties. The amounts
paid to the Distributor are included in the accompanying Statement of
Operations.
The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the
"Plan") under the 1940 Act. Under this Plan, the Investment Company is
authorized to make payments to the Distributor, or any Shareholder
Servicing Agent, as defined in the Plan, for providing distribution and
marketing services, for furnishing assistance to investors on an ongoing
basis, and for the reimbursement of direct out-of-pocket expenses charged
by the Distributor in connection with the distribution and marketing of
shares of the Investment Company and the servicing of investor accounts.
The Fund has Shareholder Service Agreements with the Adviser. For these
services, the Fund pays .025% to the Adviser, based upon the average daily
value of all Fund shares held. For the year ended August 31, 2000, the
Fund was charged shareholder servicing expenses of $264,024 by the
Adviser.
The combined distribution and shareholder servicing payments shall not
exceed .25% of the average daily value of net assets of the Fund on an
annual basis. The shareholder servicing payments shall not exceed .20% of
the average daily value of net assets of the Fund on an annual basis.
Payments that exceed the maximum amount of allowable reimbursement may be
carried forward for two years following the year in which the expenditure
was incurred so long as the plan is in effect. The Fund's responsibility
for any such expenses carried forward shall terminate at the end of two
years following the year in which the expenditure was incurred. The
Trustees or a majority of the Fund's shareholders have the right, however,
to terminate the Distribution Plan and all payments thereunder at any
time. The Fund will not be obligated to reimburse the Distributor for
carryover expenses subsequent to the Distribution Plan's termination or
noncontinuance. There were no carryover expenses as of August 31, 2000.
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Annual Report 17
SSgA
US Treasury Money Market Fund
Notes to Financial Statements, continued
August 31, 2000
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Advisory fees $ 84,399
Administration fees 34,986
Custodian fees 45,135
Distribution fees 24,270
Shareholder servicing fees 23,821
Transfer agent fees 16,537
Trustees' fees 2,316
--------
$231,464
========
Beneficial Interest: As of August 31, 2000, two shareholders (who were
also affiliates of the Investment Company) were record owners of
approximately 52% and 37%, respectively, of the total outstanding shares
of the Fund.
5. Fund Share Transactions (On a Constant Dollar Basis):

6. Interfund Lending Program
The Fund and all other funds of the Investment Company received from the
Securities and Exchange Commission an exemptive order on December 23, 1999
to establish and operate an Interfund Credit Facility. This allows the
Funds to directly lend to and borrow money from the SSgA Money Market Fund
for temporary purposes in accordance with certain conditions. The
borrowing Funds are charged the average of the current Repo Rate and the
Bank Loan Rate. The Fund did not utilize the interfund lending program
during this year.
18 Annual Report
SSgA US Treasury Money Market Fund
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
--------------------------------------------------------------------------------
Trustees
Lynn L. Anderson, Chairman
William L. Marshall
Steven J. Mastrovich
Patrick J. Riley
Richard D. Shirk
Bruce D. Taber
Henry W. Todd
Officers
Lynn L. Anderson, President, Treasurer and CEO
Mark E. Swanson, Assistant Secretary, Assistant
Treasurer and Principal Accounting Officer
J. David Griswold, Vice President and Secretary
Deedra S. Walkey, Assistant Secretary
Rick J. Chase, Assistant Secretary
Carla L. Anderson, Assistant Secretary
Investment Adviser
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Custodian, Transfer Agent and
Office of Shareholder Inquiries
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
(800) 647-7327
Distributor
Russell Fund Distributors, Inc.
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
Administrator
Frank Russell Investment Management Company
909 A Street
Tacoma, Washington 98402
Legal Counsel
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Independent Accountants
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
Annual Report 19
[COVER GRAPHIC]
SSgA(R) funds
ANNUAL REPORT
Yield Plus Fund
August 31, 2000
SSgA(R) Funds
Yield Plus Fund
Annual Report
August 31, 2000
Table of Contents
Page
Chairman's Letter......................................................... 4
Portfolio Management Discussion and Analysis.............................. 6
Report of Independent Accountants......................................... 8
Financial Statements...................................................... 9
Financial Highlights...................................................... 14
Notes to Financial Statements............................................. 15
Fund Management and Service Providers..................................... 21
"SSgA(R)" is a registered trademark of State Street Corporation and is licensed
for use by the SSgA Funds.
This report is prepared from the books and records of the Fund and it is
submitted for the general information of shareholders. This information is for
distribution to prospective investors only when preceded or accompanied by a
SSgA Funds Prospectus containing more complete information concerning the
investment objective and operations of the Fund, charges and expenses. The
Prospectus should be read carefully before an investment is made.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results. Russell Fund Distributors,
Inc., is the distributor of the SSgA Funds.
SSgA Yield Plus Fund
--------------------------------------------------------------------------------
Letter From the Chairman of State Street Global Advisors
--------------------------------------------------------------------------------
Dear Shareholders,
It is our pleasure to provide you with the SSgA Funds annual report for the
fiscal year ended August 31, 2000. The SSgA Fund Family has grown to include
twenty-four portfolios with over $21 billion in assets as of August 31, 2000.
The Fund Family provides a wide range of strategies covering the world's major
markets. The enclosed information provides an overview of the investment process
for the SSgA Yield Plus Fund. This overview contains the portfolio management
discussion, performance updates and financial information for the Fund.
In an ongoing effort to develop competitive products and services that provide
investment solutions for our clients, we have added the SSgA Intermediate
Municipal Bond Fund to the SSgA Fund Family. This Fund's investment objective
seeks to provide federally tax-exempt current income by investing primarily in a
diversified portfolio of municipal debt securities with a dollar-weighted
average maturity between three and ten years.
We are also pleased with the success of our SSgA Emerging Markets and SSgA
Growth and Income Funds as they were included in Money(R) Magazine's June 2000
issue listing of the 'Top 100 Mutual Funds'. This is the second year in a row
that these funds have been selected.
Additionally, the SSgA Tax Free Money Market and the SSgA Active International
Funds have achieved five-year performance history during the 2000 fiscal year.
Currently, all of our SSgA Money Market Funds have at least a five-year
performance history. We strive to meet our clients' needs by providing funds
with long-term records and competitive performance.
We would like to thank you for choosing the SSgA Funds. Our reputation is based
on our tradition of designing and delivering exceptional financial services to
our clients. We look forward to continue sharing the benefit of our experience
with you.
Sincerely,
/s/ Nicholas A. Lopardo
Nicholas A. Lopardo
State Street Global Advisors
Chairman and Chief Executive Officer
/s/ Timothy B. Harbert
Timothy B. Harbert
State Street Global Advisors
President and Chief Operating Officer, SSgA
4 Annual Report
SSgA Yield Plus Fund
--------------------------------------------------------------------------------
Management of the Funds
--------------------------------------------------------------------------------
[PHOTO]
Nicholas A. Lopardo
Chairman and Chief Executive Officer
[PHOTO]
Timothy B. Harbert
President and Chief Operating Officer
A Team Approach to Investment Management
Our investment strategies are the product of the combined experience of our
professional staff. Portfolio Managers work together to develop and enhance the
techniques that drive our investment processes. As a result, the portfolios we
manage benefit from the knowledge of the entire team.
Ms. Maria Pino, CFA, Principal, has been the portfolio manager primarily
responsible for investment decisions regarding the SSgA Yield Plus Fund since
May 2000. Ms. Pino joined the firm in 1997. Previously, Ms. Pino managed
non-ERISA assets in a short term fixed income fund and a money market fund at
Partners HealthCare System, Inc. Prior to this, she managed fixed income assets
for the Commonwealth of Massachusetts State Employees and Teachers Pension Fund.
She has been working in the investment management field since 1981. She holds a
BS in Accounting from Providence College, an MA in Economics from Northeastern
University and an MBA from Boston University. There are ten other portfolio
managers working with Ms. Pino.
Annual Report 5
SSgA Yield Plus Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
Objective: Maximize current income; preservation of capital and liquidity. .
Invests in: High quality, investment grade, debt instruments including: US
Treasuries and Government agencies, corporate bonds, asset-backed securities,
mortgage-backed securities, and high quality money market instruments
maintaining a duration of one year or less.
Strategy: Fund Managers base their decisions on the relative attractiveness of
different sectors and issues which vary depending on the general level of
interest rates, market determined risk premiums, as well as supply and demand
imbalances in the market.

Performance Review
For the fiscal year ended August 31, 2000, the Fund had a total return of 6.28%.
This compared favorably to the return of 5.51% for the benchmark, the Salomon
3-Month Treasury Bill Index. The Fund's performance is net of operating
expenses, while Index results do not include expenses of any kind.
Market and Portfolio Highlights
The year began on a positive note as economic data suggested ailing foreign
economies were on the mend. Federal Open Market Committee (FOMC) members, faced
with strong domestic growth and rejuvenated demand from abroad, responded by
tightening monetary policy. The FOMC raised rates by 25 basis points in June,
August and November 1999, bringing the Fed Funds target from 4.75% to 5.50%. The
FOMC took no action at its December meeting, but followed a strategy of
injecting the economy with massive amounts of cash to ease Y2K liquidity
concerns. Fourth quarter GDP logged an impressive 8.3% due to Y2K inventory
building
--------------------------------------------------------------------------------
SSgA Yield Plus Fund
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
----------------- ------------ ------
1 Year $ 10,628 6.28%
5 Years $ 13,100 5.55%+
Inception $ 14,804 5.15%+
--------------------------------------------------------------------------------
Salomon Smith Barney 3-Month Treasury Bill Index
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
----------------- ------------ ------
1 Year $ 10,551 5.51%
5 Years $ 12,882 5.20%+
Inception $ 14,445 4.81%+
--------------------------------------------------------------------------------
Salomon Smith Barney 6-Month Treasury Bill Index
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
----------------- ------------ ------
1 Year $ 10,561 5.61%
5 Years $ 12,972 5.34%+
Inception $ 14,621 4.97%+
See related Notes on following page.
6 Annual Report
SSgA Yield Plus Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
supported by the generous liquidity provisions from the Federal Reserve. This
surfeit of liquidity, in effect, loosened monetary policy when in fact tight
labor markets and excess demand called for tightening.
First quarter 2000 GDP followed with 4.8% growth rate. The Federal Reserve
needed to take back the excess liquidity and slow the economy to achieve a more
sustainable rate of growth and dampen the risks of inflation. The FOMC did so by
raising interest rates by 100 basis points in the first half of 2000. Although
GDP advanced 5.4% throughout the second quarter of 2000, fears of inflation were
tempered by the fact that productivity grew at 5% for the same period. The FOMC
opted to leave rates unchanged at the June and August meetings while maintaining
a cautious stance going forward.
By the end of August 2000, the yield curve had stabilized, with the 3-month
LIBOR at 6.67%, the 6-month LIBOR at 6.80% and the 12-month LIBOR at 6.92%. At
August 31, 2000, the two-year Treasury was at 6.17%, the 10-year was at 5.73%
and the 30-year bond was at 5.67%. This inversion in the Treasury yield curve
can be attributed to a combination of low future inflation expectations and
dramatically reduced Treasury supply.
The shape of the yield curve, credit considerations, Y2K concerns, and possible
future increases in interest rates led to a defensive investment strategy for
most of the year. The yield on the two-year Treasury reached a high of 6.23% in
December 1999. Issuance was expected to balloon during the fall, as issuers
sought funding earlier in the year to avoid any year-end market disruptions due
to Y2K. The anticipation of the increase in issuance caused credit spreads to
widen. The Fund took advantage of the spread widening and purchased securities
cheaper than they had been earlier in the year. However, the expected issuance
did not materialize and spreads tightened in December 1999.
The short end of the yield curve was quite volatile during the first eight
months of 2000. The two-year Treasury traded in a range between a high of 6.91%
and a low of 6.13%. The Fund's most significant changes occurred in the
portfolio's industry diversification. The allocation to ABS credit cards
increased from 6% to 25% of the portfolio and represented a shift from unsecured
credits to AAA secured credits. Although the finance allocation only declined
from 8% to 5% of the portfolio, a strategic shift was made from lower quality,
stand-alone finance companies to higher quality finance companies backed by a
strong parent.
-------------------------------------------------------------
Top Ten Issuers
(as a percent of Total Investments) August 31, 2000
-------------------------------------------------------------
US Bancorp 5.6%
Wells Fargo Co. 5.5
First USA Credit Card Master Trust 5.3
Chase Manhattan Corp. 5.1
DaimlerChrysler North America 5.1
SLM Student Loan Trust 4.9
Ford Motor Credit Co. 4.9
Chase Credit Card Master Trust 4.3
MBNA Master Credit Card Trust 4.1
Capital One Master Trust 4.1
-------------------------------------------------------------
---------------------------------------
Notes: The following notes relate to the Growth of $10,000 graph and table on
the preceding page.
* The Fund commenced operations on November 9, 1992. Index comparisons began
November 1, 1992.
+
+ Equal dollar amounts of 3-month Treasury bills are purchased at the
beginning of each of three consecutive months. As each bill matures all
proceeds are rolled over or reinvested in a new 3-month bill. The income
used to calculate the monthly return is derived by subtracting the
original amount invested from the maturity value. The yield curve average
is the basis for calculating the return on the Index. The Index is
rebalanced monthly by market capitalization.
++
++ The total return calculated for the Salomon Smith Barney 6-Month Treasury
Bills Index includes principal gain or loss, income and reinvestment of
proceeds. The Index is based on a rolling maturity concept and holding the
bond to maturity. For example, the Index will contain, at any point,
issues with 1-6 months of remaining maturity.
+ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results.
Annual Report 7
Report of Independent Accountants
To the Shareholders and Board of Trustees of the SSgA Funds:
In our opinion, the accompanying statement of assets and liabilities and
statement of net assets, and the related statements of operations and of changes
in net assets and the financial highlights present fairly, in all material
respects, the financial position of SSgA Yield Plus Fund (the "Fund") at August
31, 2000, the results of its operations for the fiscal year then ended and the
changes in its net assets for each of the two fiscal years in the period then
ended, and the financial highlights for each of the five fiscal years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.
Boston, Massachusetts
October 11, 2000
/s/ PricewaterhouseCoopers LLP
8 Annual Report
SSgA
Yield Plus Fund
Statement of Net Assets
August 31, 2000
Principal Market
Amount Value
(000) (000)
$ $
--------- ------
Long-Term Investments - 91.2%
Asset-Backed Securities - 42.0%
American Express Credit Account
Master Trust
Series 2000-2 Class A
6.784% due 09/15/07 (a) 16,000 16,015
Capital One Master Trust
Series 1999-1 Class A
6.759% due 07/16/07 (a) 20,000 19,981
Chase Credit Card Master Trust
Series 1999-1 Class A
6.779% due 09/15/06 (a) 16,000 16,028
Series 2000-1 Class A
6.789% due 06/15/07 (a) 5,000 4,998
CIT RV Trust
Series 1996-A Class A
5.400% due 12/15/11 4,861 4,805
Citibank Credit Card Master Trust I
Series 1998-1 Class A
5.750% due 01/15/03 4,000 3,982
Distribution Financial Services
Trust
Series 1999-1 Class A4
5.840% due 10/17/11 9,000 8,818
EQCC Home Equity Loan Trust
Series 1999-3 Class A2F
6.887% due 10/25/13 10,000 9,904
First USA Credit Card Master Trust
Series 1997-2 Class A
6.750% due 01/17/07 (a) 10,176 10,182
Series 1997-7 Class A
6.718% due 05/17/07 (a) 7,500 7,491
Series 1999-1 Class A
6.770% due 10/19/06 (a) 8,658 8,672
Fleet Credit Card Master Trust
Series 1999-D Class A
6.839% due 04/16/07 (a) 8,500 8,519
Ford Credit Auto Owner Trust
Series 2000-D Class A4
7.130% due 07/15/04 5,000 5,025
GE Capital Mortgage Services, Inc.
Series 1997-HE3 Class A3
6.520% due 08/25/13 1,207 1,200
MBNA Master Credit Card Trust
Series 1999-H Class A
6.944% due 09/15/06 (a) 20,000 20,044
Providian Master Trust
Series 1999-1 Class A
6.849% due 01/15/09 (a) 9,000 9,031
Saxon Asset Securities Trust
Series 1998-3 Class AF2
5.750% due 05/25/18 (a) 9,220 9,142
SLM Student Loan Trust
Series 1998-2 Class A1
6.867% due 04/25/07 (a) 12,148 12,081
Series 2000-3 Class A1L
6.599% due 04/25/08 (a) 12,000 11,990
Superior Wholesale Inventory
Financing Trust
Series 2000-A Class A
6.905% due 04/15/07 (a) 15,000 14,991
Wachovia Credit Card Master Trust
Series 1999-1 Class A
6.769% due 08/15/06 (a) 5,000 5,007
--------
207,906
--------
Corporate Bonds and Notes - 44.9%
Bank of America Corp.
Series H
6.878% due 03/19/02 (a) 8,000 8,000
7.350% due 04/03/02 2,000 2,005
Bank of America NA
6.860% due 03/15/02 (a) 15,000 15,000
Boeing Capital Corp.
6.870% due 03/27/02 (a) 12,500 12,482
Chase Manhattan Corp.
Series C
6.831% due 03/22/02 (a) 25,000 25,005
DaimlerChrysler North America
Holding Corp.
Series B
6.670% due 02/15/02 10,000 9,977
Series C
6.900% due 03/15/02 (a) 15,000 14,990
Fleet National Bank
6.836% due 02/01/02 (a) 9,500 9,503
Annual Report 9
SSgA
Yield Plus Fund
Statement of Net Assets, continued
August 31, 2000
Principal Market
Amount Value
(000) (000)
$ $
--------- ------
FleetBoston Financial Corp.
Series P
6.851% due 05/01/02 (a) 17,500 17,493
Ford Motor Credit Co.
6.500% due 02/28/02 6,000 5,935
6.928% due 03/19/02 (a) 5,000 5,001
6.994% due 07/16/02 (a) 13,000 13,015
Main Place Funding, LLC
Series 99-1
6.810% due 05/28/02 (a) 8,000 7,983
Merrill Lynch & Co.
Series B
6.771% due 11/09/01 (a) 2,000 2,002
7.194% due 01/11/02 (a) 5,000 5,022
Morgan Stanley Dean Witter & Co.
Series 1
6.838% due 01/28/02 (a) 4,900 4,906
Series C
6.910% due 04/08/02 (a) 9,000 8,999
US Bancorp
Series L
6.941% due 02/03/03 (a) 27,500 27,485
Wells Fargo Co.
6.814% due 04/26/02 (a) 27,000 27,027
--------
221,830
--------
Eurodollar Bonds - 3.3%
Holmes Financing PLC
Series 1 Class 1A
6.834% due 07/15/05 (a) 6,000 6,000
Lehman Brothers Holdings PLC
7.089% due 11/06/00 (a) 2,280 2,281
Vodafone Group PLC
6.962% due 12/19/01 (a) 8,000 8,006
--------
16,287
--------
Mortgage-Backed Securities - 1.0%
Federal Home Loan Mortgage Corp. Participation
Certificate
7.000% due 2000 99 99
Federal National Mortgage Association
8.000% due 2013 3,345 3,350
Government National Mortgage
Association
8.000% due 2012 1,323 1,350
--------
4,799
--------
Total Long-Term Investments
(cost $451,089) 450,822
--------
Short-Term Investments - 8.6%
AIM Short Term Investment Prime
Portfolio Class A (b) 23,751 23,751
Federal Home Loan Bank
6.660% due 04/06/01 10,000 9,995
Federated Investors Prime Cash
Obligations Fund (b) 8,756 8,756
--------
Total Short-Term Investments
(cost $42,502) 42,502
--------
Total Investments - 99.8%
(identified cost $493,591) 493,324
Other Assets and Liabilities,
Net - 0.2% 1,052
--------
Net Assets - 100.0% 494,376
========
(a) Adjustable or floating rate security.
(b) At amortized cost, which approximates market.
See accompanying notes which are an integral part of the financial statements.
10 Annual Report
SSgA
Yield Plus Fund
Statement of Assets and Liabilities
Amounts in thousands (except per share amount) August 31, 2000

See accompanying notes which are an integral part of the financial statements.
Annual Report 11
SSgA
Yield Plus Fund
Statement of Operations
Amounts in thousands For the Fiscal Year Ended August 31, 2000

See accompanying notes which are an integral part of the financial statements.
12 Annual Report
SSgA
Yield Plus Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Years Ended August 31,

See accompanying notes which are an integral part of the financial statements.
Annual Report 13
SSgA
Yield Plus Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

(a) For the periods subsequent to August 31, 1998, average month-end shares
outstanding were used for this calculation.
14 Annual Report
SSgA
Yield Plus Fund
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on one portfolio,
the SSgA Yield Plus Fund (the "Fund"). The Investment Company is a
registered and diversified open-end investment company, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), that was
organized as a Massachusetts business trust on October 3, 1987 and
operates under a First Amended and Restated Master Trust Agreement, dated
October 13, 1993, as amended (the "Agreement"). The Investment Company's
Agreement permits the Board of Trustees to issue an unlimited number of
full and fractional shares of beneficial interest at a $.001 par value.
2. Significant Accounting Policies
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements.
Security valuation: United States fixed-income securities listed and
traded principally on any national securities exchange are valued on the
basis of the last sale price or, lacking any sale, at the closing bid
price, on the primary exchange on which the security is traded. United
States over-the-counter, fixed-income securities and options are valued on
the basis of the closing bid price. Futures contracts are valued on the
basis of the last sale price.
Many fixed-income securities do not trade each day, and thus last sale or
bid prices are frequently not available. Fixed-income securities may be
valued using prices provided by a pricing service when such prices are
believed to reflect the market value of such securities.
Money market instruments maturing within 60 days of the valuation date are
valued at amortized cost.
The Fund may value securities for which market quotations are not readily
available at "fair value," as determined in good faith pursuant to
procedures established by the Board of Trustees.
Securities transactions: Securities transactions are recorded on a trade
date basis. Realized gains and losses from securities transactions are
recorded on the basis of identified cost.
Investment income: Dividend income is recorded on the ex-dividend date and
interest income is recorded daily on the accrual basis.
Amortization and accretion: All zero-coupon bond discounts and original
issue discounts are accreted for both tax and financial reporting
purposes. All short- and long-term market premiums/discounts are
amortized/accreted for both tax and financial reporting purposes.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each fund's shareholders without regard to the income
and capital gains (or losses) of the other funds.
Annual Report 15
SSgA
Yield Plus Fund
Notes to Financial Statements, continued
August 31, 2000
It is the Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Fund to distribute all of its taxable income. Therefore, the Fund paid
no federal income taxes and no federal income tax provision was required.
At August 31, 2000, the Fund had net tax basis capital loss carryovers of
$1,086,432, $1,891,302 and $80,342, which may be applied against any
realized net taxable gains in each succeeding year or until their
expiration dates of August 31, 2004, August 31, 2007, and August 31, 2008,
respectively, whichever occurs first. As permitted by tax regulations, the
Fund intends to defer a net realized capital loss of $2,664,723 incurred
from November 1, 1999 to August 31, 2000, and treat it as arising in
fiscal year 2001.
The Fund's aggregate cost of investments and the composition of unrealized
appreciation and depreciation of investment securities for federal income
tax purposes as of August 31, 2000 are as follows:
Net Unrealized
Federal Tax Unrealized Unrealized Appreciation
Cost Appreciation (Depreciation) (Depreciation)
------------ ------------ -------------- --------------
$493,591,207 $249,373 $(516,154) $(266,781)
Dividends and distributions to shareholders: The Fund declares and records
dividends on net investment income daily and pays them monthly. Capital
gain distributions, if any, are generally declared and paid annually. An
additional distribution may be paid by the Fund to avoid imposition of
federal income tax on any remaining undistributed net investment income
and capital gains.
The timing and characterization of certain income and capital gain
distributions are determined in accordance with federal tax regulations
which may differ from generally accepted accounting principles ("GAAP").
As a result, net investment income and net realized gain (or loss) from
investment transactions for a reporting year may differ significantly from
distributions during such year. The differences between tax regulations
and GAAP relate primarily to investments in certain fixed income
securities purchased at a discount, futures, mortgage-backed securities,
and certain securities sold at a loss. Accordingly, the Fund may
periodically make reclassifications among certain of its capital accounts
without impacting its net asset value.
Expenses: Most expenses can be directly attributed to the Fund. Expenses
of the investment company which cannot be directly attributed are
allocated among all funds based principally on their relative net assets.
Forward commitments/Mortgage dollar rolls: The Fund may contract to
purchase securities for a fixed price at a future date beyond customary
settlement time (not to exceed 120 days)(i.e., a "forward commitment" or
"delayed settlement" transaction, e.g., to be announced ("TBA"))
consistent with a Fund's ability to manage its investment portfolio and
meet redemption requests. The Fund may enter into mortgage dollar rolls
(principally in TBA's) in which the Fund purchases a mortgage security and
sells a similar mortgage security before settlement of the purchased
mortgage security occurs. The Fund may realize a short-term gain (or
loss), based on market movements, upon such sale. When effecting such
transactions, cash or liquid high-grade debt obligations of the Fund will
be segregated on the Fund's records in a dollar amount sufficient to make
payment for the portfolio securities to be purchased at the trade date and
maintained until the transaction is settled. A forward commitment
16 Annual Report
SSgA
Yield Plus Fund
Notes to Financial Statements, continued
August 31, 2000
transaction involves a risk of loss if the value of the security to be
purchased declines prior to the settlement date or the other party to the
transaction fails to complete the transaction.
Derivatives: To the extent permitted by the investment objective,
restrictions and policies set forth in the Fund's Prospectus and Statement
of Additional Information, the Fund may participate in various
derivative-based transactions. Derivative securities are instruments or
agreements whose value is derived from an underlying security or index.
The Fund's use of derivatives includes exchange-traded futures and options
on futures. These instruments offer unique characteristics and risks that
assist the Fund in meeting its investment objective.
The Fund typically uses derivatives in three ways: cash equitization,
hedging, and return enhancement. Cash equitization is a technique that may
be used by the Fund through the use of options and futures to earn
"market-like" returns with the Fund's excess and liquidity reserve cash
balances. Hedging is used by the Fund to limit or control risks, such as
adverse movements in exchange rates and interest rates. Return enhancement
can be accomplished through the use of derivatives in the Fund. By
purchasing certain instruments, the Fund may more effectively achieve the
desired portfolio characteristics that assist in meeting the Fund's
investment objectives. Depending on how the derivatives are structured and
utilized, the risks associated with them may vary widely. These risks are
generally categorized as market risk, liquidity risk and counterparty or
credit risk.
Futures: The Fund utilizes exchange-traded futures contracts. The primary
risks associated with the use of futures contracts are an imperfect
correlation between the change in market value of the securities held by
the Funds and the prices of futures contracts and the possibility of an
illiquid market. Changes in initial settlement value are accounted for as
unrealized appreciation (depreciation) until the contracts are terminated,
at which time realized gains and losses are recognized.
Options: The Fund may purchase and sell (write) call and put options on
securities and securities indices, provided such options are traded on a
national securities exchange or in an over-the-counter market. This Fund
may also purchase and sell call and put options on foreign currencies.
When a Fund writes a covered call or a put option, an amount equal to the
premium received by the Fund is included in the Fund's Statement of Assets
and Liabilities as an asset and as an equivalent liability. The amount of
the liability is subsequently marked-to-market to reflect the current
market value of the option written. The Fund receives a premium on the
sale of a call option but gives up the opportunity to profit from any
increase in stock value above the exercise price of the option, and when
the Fund writes a put option it is exposed to a decline in the price of
the underlying security. If an option which the Fund has written either
expires on its stipulated expiration date or the Fund enters into a
closing purchase transaction, the Fund realizes a gain (or loss, if the
cost of a closing purchase transaction exceeds the premium received when
the option was sold) without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is
extinguished. If a call option which the Fund has written is exercised,
the Fund realizes a capital gain or loss from the sale of the underlying
security, and the proceeds from such sale are increased by the premium
originally received. When a put option which a Fund has written is
exercised, the amount of the premium originally received will reduce the
cost of the security which a Fund purchases upon exercise of the option.
Realized gains (losses) on purchased options are included in net realized
gain (loss) from investments.
Annual Report 17
SSgA
Yield Plus Fund
Notes to Financial Statements, continued
August 31, 2000
The Fund's use of written options involves, to varying degrees, elements
of market risk in excess of the amount recognized in the Statement of
Assets and Liabilities. The face or contract amounts of these instruments
reflect the extent of the Fund's exposure to off balance sheet risk. The
risks may be caused by an imperfect correlation between movements in the
price of the instrument and the price of the underlying securities and
interest rates.
3. Securities Transactions
Investment transactions: For the year ended August 31, 2000, purchases and
sales of investment securities, excluding US Government and Agency
obligations, short-term investments, futures contracts, and repurchase
agreements aggregated to $756,241,760 and $693,848,946, respectively.
For the year ended August 31, 2000, purchases and sales of US Government
and Agency obligations, excluding short-term investments and futures
contracts, aggregated to $56,062,016 and $147,303,868, respectively.
Written Options Contracts: Fund transactions in written options contracts
for the year ended August 31, 2000 were as follows:
Written Options
Notional Value (1) Premiums
(000) Received
------------------ ----------
Outstanding August 31, 1999 -- $ --
Opened 750 158,200
Closed (750) (158,200)
------------------ ----------
Outstanding August 31, 2000 -- --
================== ==========
(1) Each $2,500 notional value represents 1 contract.
Securities lending: The Investment Company has a securities lending
program whereby each Fund can loan securities with a value up to 33 1/3%
of its total assets to certain brokers. The Fund receives cash (U.S.
currency), U.S. Government or U.S. Government agency obligations as
collateral against the loaned securities. To the extent that a loan is
secured by cash collateral, such collateral shall be invested by State
Street Bank and Trust Company in short-term instruments, money market
mutual funds, and such other short-term investments, provided the
investments meet certain quality and diversification requirements. Under
the securities lending arrangement, the collateral received is recorded on
the Fund's statement of assets and liabilities along with the related
obligation to return the collateral. In those situations where the Company
has relinquished control of securities transferred, it derecognizes the
securities and records a receivable from the counterparty.
Income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs, is
divided between the Fund and State Street Bank and Trust Company and is
recorded as interest income for the Fund. To the extent that a loan is
secured by non-cash collateral, brokers pay the Fund negotiated lenders'
fees, which are divided between the Fund and State Street Bank and Trust
Company and are recorded as interest income for the Fund. All collateral
received will be in an amount at least equal to 102% (for loans of U.S.
securities) or 105% (for non-U.S. securities) of the market value of the
loaned securities at the inception of each loan. Should the borrower of
the securities fail financially, there is a risk of delay in recovery of
the securities or loss of rights in the collateral. Consequently, loans
are made only to borrowers which are deemed
18 Annual Report
SSgA
Yield Plus Fund
Notes to Financial Statements, continued
August 31, 2000
to be of good financial standing. As of August 31, 2000, there were no
outstanding securities on loan and no income earned during the year.
4. Related Parties
Adviser: The Investment Company has an investment advisory agreement with
State Street Bank and Trust Company (the "Adviser") under which the
Adviser, through State Street Global Advisors, the investment management
group of the Adviser, directs the investments of the Fund in accordance
with its investment objectives, policies, and limitations. For these
services, the Fund pays a fee to the Adviser, calculated daily and paid
monthly, at the annual rate of .25% of its average daily net assets. The
Investment Company also has contracts with the Adviser to provide custody,
shareholder servicing, and transfer agent services to the Fund. These
amounts are presented in the accompanying Statement of Operations.
In addition, the Fund has entered into arrangements with its Adviser
whereby custody credits realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's expenses. During the year, the
Fund's custodian fees were reduced by $24,676 under these arrangements.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items. The
Investment Company pays the Administrator for services supplied by the
Administrator pursuant to the Administration Agreement, an annual fee,
payable monthly on a pro rata basis. For the period September 1, 1999 to
April 30, 2000, it is based on the following percentages of the combined
average daily net assets of all domestic funds: $0 up to and including
$500 million - .06%; over $500 million up to and including $1 billion -
.05%; over $1 billion - .03%. Effective May 1, 2000, the annual fee is
based on the following percentages of the average daily net assets of all
U.S. Fixed Income portfolios: $0 up to $1 billion - .0315%; over $1
billion - .029%. The Administrator will also charge a flat fee of $30,000
per year per Fund with less than $500 million in net assets and $1,500 per
year for monthly performance reports and use of Russell Performance
Universe software product. In addition, the Fund reimburses the
Administrator for out-of-pocket expenses and start-up costs for new funds.
Distributor and Shareholder Servicing: The Investment Company has a
Distribution Agreement with Russell Fund Distributors (the "Distributor")
which is a wholly-owned subsidiary of the Administrator to promote and
offer shares of the Investment Company. The Distributor may enter into
sub-distribution agreements with other non-related parties. The amounts
paid to the Distributor are included in the accompanying Statement of
Operations.
The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the
"Plan") under the 1940 Act. Under this Plan, the Investment Company is
authorized to make payments to the Distributor, or any Shareholder
Servicing Agent, as defined in the Plan, for providing distribution and
marketing services, for furnishing assistance to investors on an ongoing
basis, and for the reimbursement of direct out-of-pocket expenses charged
by the Distributor in connection with the distribution and marketing of
shares of the Investment Company and the servicing of investor accounts.
Annual Report 19
SSgA
Yield Plus Fund
Notes to Financial Statements, continued
August 31, 2000
The Fund has Shareholder Service Agreements with the Adviser, State Street
Brokerage Services, Inc. ("SSBSI"), a wholly-owned subsidiary of the
Adviser, the Adviser's Retirement Investment Services Division ("RIS"),
the Adviser's Metropolitan Division of Commercial Banking ("Commercial
Banking") and State Street Solutions ("Solutions")(collectively the
"Agents"), as well as several unaffiliated service providers. For these
services, the Fund pays .025%, .175%, .175%, .175%, and .175% to the
Adviser, SSBSI, RIS, Commercial Banking, and Solutions, respectively,
based upon the average daily value of all Fund shares held by or for
customers of these Agents. For the year ended August 31, 2000, the Fund
was charged shareholder servicing expenses of $135,030, $1,034, $17,459
and $104,875, by the Adviser, SSBSI, Commercial Banking, and Solutions,
respectively. The Fund did not incur any expenses from RIS during this
year.
The combined distribution and shareholder servicing payments shall not
exceed .25% of the average daily value of net assets of the Fund on an
annual basis. The shareholder servicing payments shall not exceed .20% of
the average daily value of net assets of the Fund on an annual basis.
Payments that exceed the maximum amount of allowable reimbursement may be
carried forward for two years following the year in which the expenditure
was incurred so long as the plan is in effect. The Fund's responsibility
for any such expenses carried forward shall terminate at the end of two
years following the year in which the expenditure was incurred. The
Trustees or a majority of the Fund's shareholders have the right, however,
to terminate the Distribution Plan and all payments thereunder at any
time. The Fund will not be obligated to reimburse the Distributor for
carryover expenses subsequent to the Distribution Plan's termination or
noncontinuance. There were no carryover expenses as of August 31, 2000.
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Advisory fees $108,435
Administration fees 15,768
Custodian fees 2,348
Distribution fees 3,458
Shareholder servicing fees 16,983
Transfer agent fees 27,357
Trustees' fees 2,193
--------
$176,542
========
Beneficial Interest: As of August 31, 2000, two shareholders (who were
also affiliates of the Investment Company) were record owners of
approximately 54% and 11%, respectively, of the total outstanding shares
of the Fund.
20 Annual Report
SSgA
Yield Plus Fund
Notes to Financial Statements, continued
August 31, 2000
5. Fund Share Transactions (amounts in thousands)

See accompanying notes which are an integral part of the financial statements.
14 Annual Report
SSgA
Bond Market Fund
Statement of Operations
Amounts in thousands For the Fiscal Year Ended August 31, 2000

See accompanying notes which are an integral part of the financial statements.
Annual Report 15
SSgA
Bond Market Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Years Ended August 31,

See accompanying notes which are an integral part of the financial statements.
16 Annual Report
SSgA
Bond Market Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

* For the period February 7, 1996 (commencement of operations) to August 31,
1996.
(a) For the periods subsequent to August 31, 1998, average month-end shares
outstanding were used for this calculation.
(b) Periods less than one year are not annualized.
(c) The ratios for the period ended August 31, 1996 are annualized.
Annual Report 17
SSgA
Bond Market Fund
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on one portfolio,
the SSgA Bond Market Fund (the "Fund"). The Investment Company is a
registered and diversified open-end investment company, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), that was
organized as a Massachusetts business trust on October 3, 1987 and
operates under a First Amended and Restated Master Trust Agreement, dated
October 13, 1993, as amended (the "Agreement"). The Investment Company's
Agreement permits the Board of Trustees to issue an unlimited number of
full and fractional shares of beneficial interest at a $.001 par value.
2. Significant Accounting Policies
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements.
Security valuation: United States fixed-income securities listed and
traded principally on any national securities exchange are valued on the
basis of the last sale price or, lacking any sale, at the closing bid
price, on the primary exchange on which the security is traded. United
States over-the-counter, fixed-income securities and options are valued on
the basis of the closing bid price.
Many fixed-income securities do not trade each day, and thus last sale or
bid prices are frequently not available. Fixed-income securities may be
valued using prices provided by a pricing service when such prices are
believed to reflect the market value of such securities.
Money market instruments maturing within 60 days of the valuation date are
valued at amortized cost.
The Fund may value securities for which market quotations are not readily
available at "fair value," as determined in good faith pursuant to
procedures established by the Board of Trustees.
Securities transactions: Securities transactions are recorded on a trade
date basis. Realized gains and losses from securities transactions are
recorded on the basis of identified cost.
Investment income: Dividend income is recorded on the ex-dividend date and
interest income is recorded daily on the accrual basis.
Amortization and accretion: All zero-coupon bond discounts and original
issue discounts are accreted for both tax and financial reporting
purposes. All short- and long-term market premiums/discounts are
amortized/accreted for both tax and financial reporting purposes.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each fund's shareholders without regard to the income
and capital gains (or losses) of the other funds.
18 Annual Report
SSgA
Bond Market Fund
Notes to Financial Statements, continued
August 31, 2000
It is the Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Fund to distribute all of its taxable income. Therefore, the Fund paid
no federal income taxes and no federal income tax provision was required.
At August 31, 2000, the Fund had net tax basis capital loss carryover of
$5,633,442, which may be applied against any realized net taxable gains in
each succeeding year or until its expiration date of August 31, 2008. As
permitted by tax regulations, the Fund intends to defer a net realized
capital loss of $6,556,689 incurred from November 1, 1999 to August 31,
2000, and treat it as arising in the fiscal year 2001.
The Fund's aggregate cost of investments and the composition of unrealized
appreciation and depreciation of investment securities for federal income
tax purposes as of August 31, 2000 are as follows:
Net Unrealized
Federal Tax Unrealized Unrealized Appreciation
Cost Appreciation (Depreciation) (Depreciation)
------------ ------------ -------------- --------------
$427,724,958 $ 2,376,558 $(1,570,902) $805,656
Dividends and distributions to shareholders: Income dividends and capital
gain distributions, if any, are recorded on the ex-dividend date.
Dividends are generally declared and paid quarterly. Capital gain
distributions are generally declared and paid annually. An additional
distribution may be paid by the Fund to avoid imposition of federal income
tax on any remaining undistributed net investment income and capital
gains.
The timing and characterization of certain income and capital gain
distributions are determined in accordance with federal tax regulations
which may differ from generally accepted accounting principles ("GAAP").
As a result, net investment income and net realized gain (or loss) on
investment transactions for a reporting year may differ significantly from
distributions during such year. The differences between tax regulations
and GAAP relate primarily to investment in certain fixed income securities
purchased at a discount, mortgage-backed securities and certain securities
sold at a loss. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting
its net asset value.
Expenses: Most expenses can be directly attributed to the Fund. Expenses
of the investment company which cannot be directly attributed are
allocated among all funds based principally on their relative net assets.
Forward commitments/Mortgage dollar rolls: The Fund may contract to
purchase securities for a fixed price at a future date beyond customary
settlement time (not to exceed 120 days)(i.e., a "forward commitment" or
"delayed settlement" transaction, e.g., to be announced ("TBA"))
consistent with a Fund's ability to manage its investment portfolio and
meet redemption requests. For example, the Fund may enter into mortgage
dollar rolls (principally in TBA's) in which the Fund purchases a mortgage
security and sells a similar mortgage security before settlement of the
purchased mortgage security occurs. The Fund may realize a short-term gain
(or loss), based on market movements, upon such sale. When effecting such
transactions, cash or liquid high-grade debt obligations of the Fund will
be segregated on the Fund's records in a dollar amount sufficient to make
payment for the portfolio securities to be purchased at the trade date and
maintained until the transaction is settled. A forward
Annual Report 19
SSgA
Bond Market Fund
Notes to Financial Statements, continued
August 31, 2000
commitment transaction involves a risk of loss if the value of the
security to be purchased declines prior to the settlement date or the
other party to the transaction fails to complete the transaction.
3. Securities Transactions
Investment transactions: For the year ended August 31, 2000, purchases and
sales of investment securities, excluding US Government and Agency
obligations and short-term investments, aggregated to $129,902,130 and
$162,119,898, respectively.
For the year ended August 31, 2000, purchases and sales of US Government
and Agency obligations, excluding short-term investments, aggregated to
$588,199,279 and $544,925,279, respectively.
Securities lending: The Investment Company has a securities lending
program whereby each Fund can loan securities with a value up to 33 1/3%
of its total assets to certain brokers. The Fund receives cash (U.S.
currency), U.S. Government or U.S. Government agency obligations as
collateral against the loaned securities. To the extent that a loan is
secured by cash collateral, such collateral shall be invested by State
Street Bank and Trust Company in short-term instruments, money market
mutual funds, and such other short-term investments, provided the
investments meet certain quality and diversification requirements. Under
the securities lending arrangement, the collateral received is recorded on
the Fund's statement of assets and liabilities along with the related
obligation to return the collateral. In those situations where the Company
has relinquished control of securities transferred, it derecognizes the
securities and records a receivable from the counterparty.
Income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs, is
divided between the Fund and State Street Bank and Trust Company and is
recorded as interest income for the Fund. To the extent that a loan is
secured by non-cash collateral, brokers pay the Fund negotiated lenders'
fees, which are divided between the Fund and State Street Bank and Trust
Company and are recorded as interest income for the Fund. All collateral
received will be in an amount at least equal to 102% (for loans of U.S.
securities) or 105% (for non-U.S. securities) of the market value of the
loaned securities at the inception of each loan. Should the borrower of
the securities fail financially, there is a risk of delay in recovery of
the securities or loss of rights in the collateral. Consequently, loans
are made only to borrowers which are deemed to be of good financial
standing. As of August 31, 2000, there were no outstanding securities on
loan and no income earned during the year.
4. Related Parties
Adviser: The Investment Company has an investment advisory agreement with
State Street Bank and Trust Company (the "Adviser") under which the
Adviser, through State Street Global Advisors, the investment management
group of the Adviser, directs the investments of the Fund in accordance
with its investment objectives, policies, and limitations. For these
services, the Fund pays a fee to the Adviser, calculated daily and paid
monthly, at the annual rate of .30% of its average daily net assets. The
Adviser has agreed to reimburse the Fund for all expenses in excess of
.50% of average daily net assets on an annual basis. The Investment
Company also has contracts with the Adviser to provide custody,
shareholder servicing and transfer agent services to the Fund. These
amounts are presented in the accompanying Statement of Operations.
20 Annual Report
SSgA
Bond Market Fund
Notes to Financial Statements, continued
August 31, 2000
In addition, the Fund has entered into arrangements with its Adviser
whereby custody credits realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's expenses. During the year, the
Fund's custodian fees were reduced by $2,925 under these arrangements.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items. The
Investment Company pays the Administrator for services supplied by the
Administrator pursuant to the Administration Agreement, an annual fee,
payable monthly on a pro rata basis. For the period September 1, 1999 to
April 30, 2000, it is based on the following percentages of the average
daily net assets of all domestic funds: $0 up to and including $500
million - .06%; over $500 million up to and including $1 billion - .05%;
over $1 billion - .03%. Effective May 1, 2000, the annual fee is based on
the following percentages of the average daily net assets of all U.S.
Fixed Income portfolios: $0 up to $1 billion - .0315%; over $1 billion -
.029%. The Administrator will also charge a flat fee of $30,000 per year
per Fund with less than $500 million in net assets and $1,500 per year for
monthly performance reports and use of Russell Performance Universe
software product. In addition, the Fund reimburses the Administrator for
out-of-pocket expenses and start-up costs for new funds.
Distributor and Shareholder Servicing: The Investment Company has a
Distribution Agreement with Russell Fund Distributors (the "Distributor")
which is a wholly-owned subsidiary of the Administrator to promote and
offer shares of the Investment Company. The Distributor may enter into
sub-distribution agreements with other non-related parties. The amounts
paid to the Distributor are included in the accompanying Statement of
Operations.
The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the
"Plan") under the 1940 Act. Under this Plan, the Investment Company is
authorized to make payments to the Distributor, or any Shareholder
Servicing Agent, as defined in the Plan, for providing distribution and
marketing services, for furnishing assistance to investors on an ongoing
basis, and for the reimbursement of direct out-of-pocket expenses charged
by the Distributor in connection with the distribution and marketing of
shares of the Investment Company and the servicing of investor accounts.
The Fund has Shareholder Service Agreements with the Adviser, the
Adviser's Retirement Investment Services Division ("RIS"), the Adviser's
Metropolitan Division of Commercial Banking ("Commercial Banking") and
State Street Solutions ("Solutions")(collectively the "Agents"), as well
as several unaffiliated service providers. For these services, the Fund
pays .025%, .050%, .050%, and .100% to the Adviser, RIS, Commercial
Banking, and Solutions, respectively, based upon the average daily value
of all Fund shares held by or for customers of these Agents. For the year
ended August 31, 2000, the Fund was charged shareholder servicing expenses
of $55,859 and $24,662, by the Adviser and Solutions.
The combined distribution and shareholder servicing payments shall not
exceed .25% of the average daily value of net assets of the Fund on an
annual basis. The shareholder servicing payments shall not exceed .20% of
the average daily value of net assets of the Fund on an annual basis.
Payments that exceed the maximum amount of
Annual Report 21
SSgA
Bond Market Fund
Notes to Financial Statements, continued
August 31, 2000
allowable reimbursement may be carried forward for two years following the
year in which the expenditure was incurred so long as the plan is in
effect. The Fund's responsibility for any such expenses carried forward
shall terminate at the end of two years following the year in which the
expenditure was incurred. The Trustees or a majority of the Fund's
shareholders have the right, however, to terminate the Distribution Plan
and all payments thereunder at any time. The Fund will not be obligated to
reimburse the Distributor for carryover expenses subsequent to the
Distribution Plan's termination or noncontinuance. There were no carryover
expenses as of August 31, 2000.
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Advisory fees $ 80,663
Administration fees 11,030
Custodian fees 12,014
Distribution fees 4,483
Shareholder servicing fees 19,760
Transfer agent fees 6,127
Trustees' fees 1,742
--------
$135,819
========
5. Fund Share Transactions (amounts in thousands)

6. Interfund Lending Program
The Fund and all other funds of the Investment Company received from the
Securities and Exchange Commission an exemptive order on December 23, 1999
to establish and operate an Interfund Credit Facility. This allows the
Funds to directly lend to and borrow money from the SSgA Money Market Fund
for temporary purposes in accordance with certain conditions. The
borrowing Funds are charged the average of the current Repo Rate and the
Bank Loan Rate. The Fund did not utilize the interfund lending program
during this year.
22 Annual Report
SSgA
Bond Market Fund
Notes to Financial Statements, continued
August 31, 2000
7. Dividends
On September 1, 2000, the Board of Trustees declared a dividend of $.1397
from net investment income, payable on September 8, 2000 to shareholders
of record on September 5, 2000.
Annual Report 23
SSgA Bond Market Fund
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
--------------------------------------------------------------------------------
Trustees
Lynn L. Anderson, Chairman
William L. Marshall
Steven J. Mastrovich
Patrick J. Riley
Richard D. Shirk
Bruce D. Taber
Henry W. Todd
Officers
Lynn L. Anderson, President, Treasurer and CEO
Mark E. Swanson, Treasurer and Principal Accounting Officer
J. David Griswold, Vice President and Secretary
Deedra S. Walkey, Assistant Secretary
Rick J. Chase, Assistant Treasurer
Carla L. Anderson, Assistant Secretary
Investment Adviser
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Custodian, Transfer Agent and
Office of Shareholder Inquiries
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
(800) 647-7327
Distributor
Russell Fund Distributors, Inc.
One International Place, 27th Floor
Boston, Massachusetts 02110
(800) 997-7327
Administrator
Frank Russell Investment Management Company
909 A Street
Tacoma, Washington 98402
Legal Counsel
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Independent Accountants
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
24 Annual Report
[COVER GRAPHIC]
SSgA(R) funds
ANNUAL REPORT
S&P 500 Index Fund
August 31, 2000
SSgA(R) Funds
S&P 500 Index Fund
Annual Report
August 31, 2000
Table of Contents
Page
Chairman's Letter......................................................... 4
Portfolio Management Discussion and Analysis.............................. 6
Report of Independent Accountants......................................... 8
Financial Statements...................................................... 9
Financial Highlights...................................................... 12
Notes to Financial Statements............................................. 13
Tax Information........................................................... 19
Fund Management and Service Providers..................................... 20
"SSgA(R)" is a registered trademark of State Street Corporation and is licensed
for use by the SSgA Funds.
This report is prepared from the books and records of the Fund and it is
submitted for the general information of shareholders. This information is for
distribution to prospective investors only when preceded or accompanied by a
SSgA Funds Prospectus containing more complete information concerning the
investment objective and operations of the Fund, charges and expenses. The
Prospectus should be read carefully before an investment is made.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results. Russell Fund Distributors,
Inc., is the distributor of the SSgA Funds.
SSgA S&P 500 Index Fund
--------------------------------------------------------------------------------
Letter From the Chairman of State Street Global Advisors
--------------------------------------------------------------------------------
Dear Shareholders,
It is our pleasure to provide you with the SSgA Funds annual report for the
fiscal year ended August 31, 2000. The SSgA Fund Family has grown to include
twenty-four portfolios with over $21 billion in assets as of August 31, 2000.
The Fund Family provides a wide range of strategies covering the world's major
markets. The enclosed information provides an overview of the investment process
for the SSgA S&P 500 Index Fund. This overview contains the portfolio management
discussion, performance updates and financial information for the Fund.
Effective June 1, 2000, the SSgA S&P 500 Index Fund began investing all of its
assets in the State Street Equity 500 Index Portfolio (the "Portfolio"). Under
this structure, sometimes referred to as a "master/feeder" arrangement, the SSgA
S&P 500 Fund is, in effect, a participating shareholder in the Portfolio. The
SSgA S&P 500 Index Fund was converted with the best interests of our
shareholders in mind, and it is anticipated that the Fund should indirectly
benefit from the economies of scale associated with this type of arrangement.
The most recent financial statement for the Portfolio is included in this book.
In an ongoing effort to develop competitive products and services that provide
investment solutions for our clients, we have added the SSgA Intermediate
Municipal Bond Fund to the SSgA Fund Family. This Fund's investment objective
seeks to provide federally tax-exempt current income by investing primarily in a
diversified portfolio of municipal debt securities with a dollar-weighted
average maturity between three and ten years.
We are also pleased with the success of our SSgA Emerging Markets and SSgA
Growth and Income Funds as they were included in Money(R) Magazine's June 2000
issue listing of the 'Top 100 Mutual Funds'. This is the second year in a row
that these funds have been selected.
Additionally, the SSgA Tax Free Money Market and the SSgA Active International
Funds have achieved five-year performance history during the 2000 fiscal year.
Currently, all of our SSgA Money Market Funds have at least a five-year
performance history. We strive to meet our clients' needs by providing funds
with long-term records and competitive performance.
We would like to thank you for choosing the SSgA Funds. Our reputation is based
on our tradition of designing and delivering exceptional financial services to
our clients. We look forward to continue sharing the benefit of our experience
with you.
Sincerely,
/s/ Nicholas A. Lopardo
Nicholas A. Lopardo
State Street Global Advisors
Chairman and Chief Executive Officer
/s/ Timothy B. Harbert
Timothy B. Harbert
State Street Global Advisors
President and Chief Operating Officer, SSgA
4 Annual Report
SSgA S&P 500 Index Fund
--------------------------------------------------------------------------------
Management of the Funds
--------------------------------------------------------------------------------
[PHOTO]
Nicholas A. Lopardo
Chairman and Chief Executive Officer
[PHOTO]
Timothy B. Harbert
President and Chief Operating Officer
A Team Approach to Investment Management
Our investment strategies are the product of the combined experience of our
professional staff. Portfolio Managers work together to develop and enhance the
techniques that drive our investment processes. As a result, the portfolios we
manage benefit from the knowledge of the entire team.
Mr. James May, Principal, has been the portfolio manager primarily responsible
for investment decisions regarding the SSgA S&P 500 Index Fund since May 1995.
Mr. May has been a portfolio manager in the US Structured Products Group of
State Street since January 1994. He served as an Investment Support Analyst in
the US Passive Services Group from 1991 to 1993. He holds a BS in Finance from
Bentley College and an MBA from Boston College. There are four other managers
working with Mr. May.
Annual Report 5
SSgA S&P 500 Index Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
Objective: To replicate the total return of the S&P(R)500 Index before expenses.
Invests in: Shares of the State Street Equity 500 Index Portfolio.
Strategy: The Portfolio's holdings are composed of the 500 stocks in the S&P
500(R) Index. The Index is designed to capture the price performance of a large
cross-section of the US publicly traded stock market.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Dates S&P 500 Index Fund S&P 500(R) Index**
Inception* $10,000 $10,000
1993 $10,806 $10,842
1994 $11,377 $11,435
1995 $13,779 $13,887
1996 $16,323 $16,488
1997 $22,901 $23,191
1998 $24,713 $25,068
1999 $34,480 $35,054
2000 $40,086 $40,775
================================================================================
Performance Review
The SSgA S&P 500 Fund closed the fiscal year ended August 31, 2000 with a 16.26%
return, which closely mirrors the S&P 500(R) Index return of 16.33% for the same
period. The Fund's slight deviation from the benchmark return is attributable
principally to the payment of fund operating expenses. Index results do not
reflect expenses of any kind.
Effective June 1, 2000, the SSgA S&P 500 Fund began investing all of its assets
in the State Street Equity 500 Index Portfolio (the "Portfolio"). As a result,
substantially all of the investable assets of the SSgA S&P 500 Fund were
exchanged, in whole, for beneficial interest in the Portfolio. Under this
arrangement, the SSgA S&P 500 Fund does not hold any individual securities, but
based on its shares outstanding in the Portfolio, receives an allocation of
income, expenses, and capital gains/losses generated by the Portfolio.
The SSgA S&P 500 Fund continues to seek returns which replicate the total return
of the S&P 500(R) Index. The stocks of
--------------------------------------------------------------------------------
SSgA S&P 500 Index Fund
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
------------ ----------- -----------
1 Year $ 11,626 16.26%
5 Years $ 29,092 23.81%+
Inception $ 40,086 19.85%+
--------------------------------------------------------------------------------
Standard & Poor's(R) 500 Composite Stock Price Index
--------------------------------------------------------------------------------
Period Ended Growth of Total
08/31/00 $10,000 Return
------------ ----------- -----------
1 Year $ 11,633 16.33%
5 Years $ 29,362 24.04%+
Inception $ 40,775 20.12%+
See related Notes on following page.
6 Annual Report
SSgA S&P 500 Index Fund
--------------------------------------------------------------------------------
Portfolio Management Discussion and Analysis
--------------------------------------------------------------------------------
the S&P 500(R) Index represent approximately 79% of the market value of all US
common stocks. Standard and Poor's Corporation chooses the 500 stocks to capture
the price performance of a large cross-section of the US publicly traded stock
market. The Index is also structured to approximate the general distribution of
industries in the US economy and does not necessarily represent the 500 largest
companies.
Market and Portfolio Highlights
The US equity market rally that began in 1994 limped forward for much of the
past fiscal year, as most of the return was gained in the last quarter of 1999.
Inflation continued to remain somewhat subdued as Alan Greenspan and the Federal
Open Market Committee (FOMC) attempted to engineer a "soft landing" for the US
economy. The FOMC has increased the Fed Funds rate a full 1%, to 6.5%, since
February 2000. Earnings surprises and extreme market volatility have also helped
to keep the reigns on the once high flying US equity markets. Softening retail
numbers and soaring energy prices increased the inflation fears of equity
investors as the fiscal year came to a close.
A majority of the S&P 500(R) Index return of 16.33% can be attributed to the
last calendar quarter of 1999 when the Index was up 14.88%. Further evidence of
a cooling stock market and a cautious investing community was the fact that the
first six months of 2000 resulted in a decline of 0.42%, the first semi-annual
loss for the Index since 1994.
Over the past fiscal year, Technology remained the hot sector to watch. The
weight of the Technology sector in the S&P 500(R) Index increased from 23% at
the end of last fiscal year, to 32% at August 31, 2000. Much of that growth was
provided by the sector's excellent return of 41.78% over the past fiscal year.
Impressive as that return is, it is not even half of the 99.54% the sector
returned in fiscal year ended August 31, 1999.
The Tech sector also had major additions during the period. Yahoo was added to
the Index in December 1999, with JDS Uniphase joining in July 2000. At nearly
1.00% of the overall sector, JDS Uniphase was the largest addition, as measured
by cap weight in the Index, since Microsoft was added. Microsoft's well
publicized antitrust battle with the Federal Government decreased its market
capitalization enough to take it out of contention for the largest capitalized
company in the Index.
Some of the best performing stocks came from the Technology sector. Computer
network, software, and communications equipment companies such as Network
Appliance, Oracle and Corning provided the best returns for the past fiscal
year, with incredible gains of 612.46%, 398.29%, and 394.49%, respectively.
However, the past year was not pleasant for every Tech stock, as some of the
worst performers in the Index came from that sector as well. This is evidenced
by dismal returns from both Unysis and Compuware, posting losses of 69.77% and
65.01%, respectively.
Technology was not the only sector that performed well. The Financial sector,
comprising nearly 20% of the Index, provided a return of 29.18%. The sector was
led by firms such as Morgan Stanley, Northern Trust and State Street Corp, all
posting strong returns of 152.37%, 100.06%, and 97.73% respectively.
The Capital Goods sector dragged the S&P 500(R) Index as the worst performing
sector with a loss of 14.85% for the current period. Two of the worst performing
stocks in the Index are in the Capital Goods sector. Owens Corning had the worst
return, dropping 80.49%, while McDermott International was not far behind
posting a loss of 65.04%.
---------------------
Notes: The following notes relate to the Growth of $10,000 graph and table on
the preceding page.
* The Fund commenced operations on December 30, 1992. Index comparison began
December 31, 1992.
** The Standard & Poor's(R) 500 Composite Stock Index is composed of 500
common stocks which are chosen by Standard & Poor's Corporation to best
capture the price performance of a large cross-section of the US publicly
traded stock market. The Index is structured to approximate the general
distribution of industries in the US economy.
+ Annualized.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500" and
"500" are trademarks of Standard & Poor's Corporation and have been licensed for
use by The SSgA Fund. The Product is not sponsored, endorsed, sold or promoted
by Standard & Poor's, and Standard & Poor's makes no representation regarding
the advisability of investing in the Product.
Performance is historical and assumes reinvestment of all dividends and capital
gains. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than when purchased.
Past performance is not indicative of future results.
Annual Report 7
Report of Independent Accountants
To the Shareholders and Board of Trustees of the SSgA Funds:
In our opinion, the accompanying statement of assets and liabilities and
statement of net assets, and the related statements of operations and of changes
in net assets and the financial highlights present fairly, in all material
respects, the financial position of SSgA S&P 500 Index Fund (the "Fund") at
August 31, 2000, the results of its operations for the fiscal year then ended
and the changes in its net assets for each of the two fiscal years in the period
then ended, and the financial highlights for each of the five fiscal years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of the security at
August 31, 2000 by correspondence with the custodian, provide a reasonable basis
for our opinion.
Boston, Massachusetts
October 11, 2000
/s/ PricewaterhouseCoopers LLP
8 Annual Report
SSgA
S&P 500 Index Fund
Statement of Assets and Liabilities
Amounts in thousands (except per share amount) August 31, 2000
Assets
Investment in State Street Equity 500 Index Portfolio, at value ... $3,108,325
Receivables:
Fund shares sold ............................................... 2,077
Miscellaneous receivables ...................................... 23
From Advisor ................................................... 34
Prepaid expenses .................................................. 15
----------
Total assets ................................................ 3,110,474
Liabilities
Payables:
Fund shares redeemed .............................. $ 4,631
Accrued fees to affiliates ........................ 656
Other accrued expenses ............................ 20
----------
Total liabilities ........................................... 5,307
----------
Net Assets ........................................................ $3,105,167
==========
Net Assets Consist of:
Undistributed net investment income ............................... $ 7,507
Accumulated net realized gain (loss) .............................. 120,531
Unrealized appreciation (depreciation) on:
Portfolio investments .......................................... 844,232
Portfolio futures contracts .................................... 2,266
Shares of beneficial interest ..................................... 118
Additional paid-in capital ........................................ 2,130,513
----------
Net Assets ........................................................ $3,105,167
==========
Net Asset Value, offering and redemption price per share:
($3,105,166,699 divided by 117,575,679 shares of $.001 par value
shares of beneficial interest outstanding) .................. $ 26.41
==========
See accompanying notes which are an integral part of the financial statements.
Annual Report 9
SSgA
S&P 500 Index Fund
Statement of Operations
Amounts in thousands For the Fiscal Year Ended August 31, 2000
Investment Income
Dividends (a) ................................................. $ 27,833
Interest (a) .................................................. 495
Dividends allocated from Portfolio ............................ 8,131
Interest allocated from Portfolio ............................. 589
Expenses allocated from Portfolio ............................. (336)
----------
Total investment income .................................... 36,712
Expenses
Advisory fees ..................................... $ 2,189
Administrative fees ............................... 816
Custodian fees .................................... 406
Distribution fees ................................. 1,019
Transfer agent fees ............................... 287
Professional fees ................................. 66
Registration fees ................................. 113
Shareholder servicing fees ........................ 1,547
Trustees' fees .................................... 56
Miscellaneous ..................................... 115
----------
Expenses before reductions ........................ 6,614
Expense reductions ................................ (1,666)
----------
Expenses, net .............................................. 4,948
----------
Net investment income ............................................ 31,764
----------
Net Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investment transactions allocated from Portfolio .... (24,066)
Futures transactions allocated from Portfolio ....... 308
Futures transactions (a) ............................ (134)
Investment transactions (a) ......................... 271,023
----------
Futures transactions (a) ............................ 247,131
Net change in unrealized appreciation (depreciation) on:
Investments allocated from Portfolio ................ 844,232
Futures contracts allocated from Portfolio .......... 2,266
Futures (a) ......................................... 750
Investments (a) ..................................... (678,384) 168,864
---------- ----------
Net realized and unrealized gain (loss) .......................... 415,995
----------
Net increase (decrease) in net assets from operations ............ $ 447,759
==========
(a) Amount represents results from operations prior to June 1, 2000
(conversion to Master-Feeder structure).
See accompanying notes which are an integral part of the financial statements.
10 Annual Report
SSgA
S&P 500 Index Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Years Ended August 31,

See accompanying notes which are an integral part of the financial statements.
Annual Report 11
SSgA
S&P 500 Index Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

(a) For the periods subsequent to August 31, 1998, average month-end shares
outstanding were used for this calculation.
(b) See Note 4 for current period amounts.
(c) Expense ratios for the fiscal year ended August 31, 2000 includes the
Fund's share of the Portfolio's allocated expenses for the period June 1,
2000 (commencement of the Master-Feeder structure) to August 31, 2000.
(d) Portfolio turnover represents the rate of portfolio activity, for the
period September 1, 1999 through May 31, 2000, while the Fund was making
investments directly in securities.
12 Annual Report
SSgA
S&P 500 Index Fund
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on one portfolio,
the SSgA S&P 500 Index Fund (the "Fund"). The Investment Company is a
registered and diversified open-end investment company, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), that was
organized as a Massachusetts business trust on October 3, 1987 and
operates under a First Amended and Restated Master Trust Agreement, dated
October 13, 1993, as amended (the "Agreement"). The Investment Company's
Agreement permits the Board of Trustees to issue an unlimited number of
full and fractional shares of beneficial interest at a $.001 par value.
The Fund invests all of its investable assets in interests in State Street
Equity 500 Index Portfolio (the "Portfolio"). The investment objective and
policies of the Portfolio are the same as the Fund. On June 1, 2000, the
Fund transferred substantially all of its investable assets with a value
of $2,846,508,871, including unrealized appreciation of $625,464,206 to
the Portfolio in exchange for interests in the Portfolio. The value of the
Fund's investment in the Portfolio reflects the Fund's proportionate
interest in the net assets of the Portfolio (approximately 87.0% at August
31, 2000). The performance of the Fund is directly affected by the
performance of the Portfolio. The financial statements of the Portfolio,
including the portfolio of investments, are included elsewhere in this
report and should be read in conjunction with the Fund's financial
statements.
2. Significant Accounting Policies
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements.
Security valuation: The Fund records its investment in the Portfolio at
value. Valuation of securities held by the Portfolio is discussed in Note
2 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.
Securities transactions: Securities transactions were recorded on a trade
date basis. Realized gains and losses from securities transactions were
recorded on the basis of identified cost.
Investment income: Dividend income was recorded on the ex-dividend date
and interest income was recorded daily on the accrual basis through May
31, 2000. Currently, the Fund's net investment income consists of the
Fund's pro rata share of the net investment income of the Portfolio, less
all expenses of the Fund determined in accordance with accounting
principles generally accepted in the United States.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each fund's shareholders without regard to the income
and capital gains (or losses) of the other funds.
It is the Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Fund to distribute all of its taxable income. Therefore, the Fund paid
no federal taxes and no federal income tax provision was required.
Annual Report 13
SSgA
S&P 500 Index Fund
Notes to Financial Statements, continued
August 31, 2000
Dividends and distributions to shareholders: Income dividends and capital
gain distributions, if any, are recorded on the ex-dividend date. The Fund
declares and pays dividends quarterly. Capital gain distributions, if any,
are generally declared and paid annually. An additional distribution may
be paid by the Fund to avoid imposition of federal income tax on any
remaining undistributed net investment income and capital gains.
The timing and characterization of certain income and capital gain
distributions are determined in accordance with federal tax regulations
which may differ from generally accepted accounting principles ("GAAP").
As a result, net investment income and net realized gain (or loss) from
investment transactions for a reporting period may differ significantly
from distributions during such period. Accordingly, the Fund
reclassifications among certain of its capital accounts without impacting
its net asset value made the following:
Undistributed Net Investment Income $ (156)
Accumulated Net Realized Gain (Loss) (123,519,583)
Additional Paid-in Capital 123,519,739
Expenses: Most expenses can be directly attributed to the individual Fund.
Additionally, expenses allocated from the Portfolio are recorded and
identified separately in the Statement of Operations. Expenses of the
investment company which cannot be directly attributed are allocated among
all funds based principally on their relative net assets.
Derivatives: To the extent permitted by the investment objectives,
restrictions and policies set forth in the Fund's Prospectus and Statement
of Additional Information, the Fund participated in various
derivative-based transactions through May 31, 2000. Derivative securities
are instruments or agreements whose value is derived from an underlying
security or index. These instruments offer unique characteristics and
risks that assist the Fund to meet its investment objective.
The Fund typically used derivatives for cash equitization. Cash
equitization is a technique that is used by the Fund through the use of
options and futures to earn "market-like" returns with the Fund's excess
and liquidity reserve cash balances. By purchasing certain instruments, a
fund may more effectively achieve the desired portfolio characteristics
that allow the Fund to meet its investment objective. The Fund used
futures and options contracts solely for the purpose of cash management.
The primary risks associated with the use of derivatives are generally
categorized as market risk.
Futures: The Fund utilized exchange-traded futures contracts through May
31, 2000. The primary risks associated with the use of futures contracts
are an imperfect correlation between the change in market value of the
securities held by the Fund and the prices of futures contracts and the
possibility of an illiquid market. Changes in initial settlement value are
accounted for as unrealized appreciation (depreciation) until the
contracts are terminated, at which time realized gains and losses are
recognized.
3. Securities Transactions
Investment transactions: For the period September 1, 1999 to May 31, 2000,
purchases and sales of investment securities, excluding short-term
investments and futures contracts, aggregated to $469,903,949 and
$524,456,924, respectively. Subsequent to the transfer of assets to the
Portfolio on June 1, 2000, increases and decreases in the
14 Annual Report
SSgA
S&P 500 Index Fund
Notes to Financial Statements, continued
August 31, 2000
Fund's investment in the Portfolio aggregated $87,602,381 and $148,124,655
respectively, for the period June 1, 2000 to August 31, 2000. Two
redemptions in-kind of securities resulted in a realized gain of
$123,883,217.
Securities Lending: The Investment Company has a securities lending
program whereby each Fund can loan securities with a value up to 33 1/3%
of its total assets to certain brokers. The Fund receives cash (U.S.
currency), U.S. Government or U.S. Government agency obligations as
collateral against the loaned securities. To the extent that a loan is
secured by cash collateral, such collateral shall be invested by State
Street Bank and Trust Company in short-term instruments, money market
mutual funds, and such other short-term investments, provided the
investments meet certain quality and diversification requirements. Under
the securities lending arrangement, the collateral received is recorded on
the Fund's statement of assets and liabilities along with the related
obligation to return the collateral. In those situations where the Company
has relinquished control of securities transferred, it derecognizes the
securities and records a receivable from the counterparty.
Income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs, is
divided between the Fund and State Street Bank and Trust Company and is
recorded as interest income for the Fund. To the extent that a loan is
secured by non-cash collateral, brokers pay the Fund negotiated lenders'
fees, which are divided between the Fund and State Street Bank and Trust
Company and are recorded as interest income for the Fund. All collateral
received will be in an amount at least equal to 102% (for loans of U.S.
securities) or 105% (for non-U.S. securities) of the market value of the
loaned securities at the inception of each loan. Should the borrower of
the securities fail financially, there is a risk of delay in recovery of
the securities or loss of rights in the collateral. Consequently, loans
are made only to borrowers which are deemed to be of good financial
standing. The Fund participated in the securities lending program up to
May 31, 2000. Included in interest income is securities lending income of
$245,161 for the period September 1, 1999 to May 31, 2000.
4. Related Parties
Adviser: The Investment Company had an investment advisory agreement with
State Street Bank and Trust Company (the "Adviser") under which the
Adviser, through State Global Advisors, the investment management group of
the Adviser, directed the investments of the Fund in accordance with its
investment objectives, policies, and limitations through May 31, 2000. For
these services, the Fund paid a fee to the Adviser, calculated daily and
paid monthly, at the annual rate of .10% of its average daily net assets.
For the period September 1, 1999 to December 31, 1999, the Adviser
voluntarily agreed to waive up to the full amount of its advisory fee to
the extent that total expenses exceeded .18% of its average daily net
assets on an annual basis. For the period January 1, 2000 to May 31, 2000,
the Adviser agreed to reimburse the Fund for all expenses in excess of
.18% of average daily net assets on an annual basis and has also agreed to
waive .07% of its .10% management fee. Effective June 1, 2000, the Fund is
allocated a charge for a management fee from the Portfolio, calculated
daily at an annual rate of .045% of its average daily net assets. This fee
relates to the advisory, custody and administrative fees provided by the
Portfolio on behalf of its investors. For the period June 1, 2000 to
August 31, 2000, the Adviser agreed to reimburse the Fund for all fund and
allocated portfolio expenses that exceed .18%. The total amount of the
waiver and the reimbursement for the year ended August 31, 2000 were
$1,513,796 and $139,830, respectively. As of August 31, 2000, the
receivable due from the Adviser for reimbursed expenses in excess of the
expense cap has been netted against the Advisory fee payable. See Note 4
of the Portfolio's Notes to Financial Statements which
Annual Report 15
SSgA
S&P 500 Index Fund
Notes to Financial Statements, continued
August 31, 2000
are included elsewhere in this report. The Investment Company also has
contracts with the Adviser to provide fund accounting, shareholder
servicing and transfer agent services to the Fund. These amounts are
presented on the accompanying Statement of Operations.
In addition, the Fund has entered into arrangements with its Adviser
whereby custody credits realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's expenses. During the year, the
Fund's custodian fees were reduced by $12,316 under these arrangements.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items. The
Investment Company pays the Administrator for services supplied by the
Administrator pursuant to the Administration Agreement, an annual fee,
payable monthly on a pro rata basis. For the period September 1, 1999 to
April 30, 2000, it is based on the following percentages of the average
daily net assets of all domestic funds: $0 up to and including $500
million - .06%; over $500 million up to and including $1 billion - .05%;
over $1 billion - .03%. For the period May 1, 2000 to May 31, 2000, the
annual fee is based on the following percentages of the daily net assets
of all U.S. Equity portfolios: $0 to $2 billion - .0315%; over $2 billion
- .029%. Effective June 1, 2000, the annual fee is based on the following
percentages of the average daily net assets of the Fund: $0 to $1 billion
- .0315%; over $1 billion - .01%. The Administrator will also charge a
flat fee of $30,000 per year per Fund with less than $500 million in net
assets and $1,500 per year for monthly performance reports and use of
Russell Performance Universe software product. In addition, the Fund
reimburses the Administrator for out-of-pocket expenses and start-up costs
for new funds.
Distributor and Shareholder Servicing: The Investment Company has a
Distribution Agreement with Russell Fund Distributors (the "Distributor")
which is a wholly-owned subsidiary of the Administrator to promote and
offer shares of the Investment Company. The Distributor may enter into
sub-distribution agreements with other non-related parties. The amounts
paid to the Distributor are included in the accompanying Statement of
Operations.
The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the
"Plan") under the 1940 Act. Under this Plan, the Investment Company is
authorized to make payments to the Distributor, or any Shareholder
Servicing Agent, as defined in the Plan, for providing distribution and
marketing services, for furnishing assistance to investors on an ongoing
basis, and for the reimbursement of direct out-of-pocket expenses charged
by the Distributor in connection with the distribution and marketing of
shares of the Investment Company and the servicing of investor accounts.
The Fund has Shareholder Service Agreements with the Adviser, the
Adviser's Retirement Investment Services Division ("RIS"), the Adviser's
Metropolitan Division of Commercial Banking ("Commercial Banking") and
State Street Solutions ("Solutions")(collectively the "Agents"), as well
as several unaffiliated service providers. For these services, the Fund
pays .025%, .050%, .050% and .100% to the Adviser, RIS, Commercial
Banking, and Solutions, respectively based upon the average daily value of
all Fund shares held by or for customers of these
16 Annual Report
SSgA
S&P 500 Index Fund
Notes to Financial Statements, continued
August 31, 2000
Agents. For the year ended August 31, 2000, the Fund was charged
shareholder servicing expenses of $729,441, $123,434, $371, and $185,204,
by the Adviser, RIS, Commercial Banking and Solutions, respectively.
The combined distribution and shareholder servicing payments shall not
exceed .25% of the average daily value of net assets of the Fund on an
annual basis. The shareholder servicing payments shall not exceed .20% of
the average daily value of net assets of the Fund on an annual basis.
Payments that exceed the maximum amount of allowable reimbursement may be
carried forward for two years following the year in which the expenditure
was incurred so long as the plan is in effect. The Fund's responsibility
for any such expenses carried forward shall terminate at the end of two
years following the year in which the expenditure was incurred. The
Trustees or a majority of the Fund's shareholders have the right, however,
to terminate the Distribution Plan and all payments thereunder at any
time. The Fund will not be obligated to reimburse the Distributor for
carryover expenses subsequent to the Distribution Plan's termination or
noncontinuance. There were no carryover expenses as of August 31, 2000.
Affiliated Brokerage: The Fund placed a portion of its portfolio
transactions with State Street Brokerage Services, Inc. ("SSBSI"), an
affiliated broker dealer of the Fund's Adviser. The commissions paid to
SSBSI were $96,304 for the period September 1, 1999 to May 31, 2000.
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Administration fees $ 45,125
Fund accounting fees 3,036
Distribution fees 44,623
Shareholder servicing fees 538,503
Transfer agent fees 23,044
Trustees' fees 1,695
----------
$ 656,026
==========
Beneficial Interest: As of August 31, 2000, one shareholder was a record
owner of approximately 10% of the total outstanding shares of the Fund.
5. Fund Share Transactions (amounts in thousands)

-----------
* The Portfolio commenced operations on March 1, 2000.
See notes to financial statements.
30 Annual Report
State Street Equity 500 Index Portfolio
Statement of Changes in Net Assets
(Amounts in thousands) For the Period Ended August 31, 2000*

-----------
* The Portfolio commenced operations on March 1, 2000.
See notes to financial statements.
Annual Report 31
State Street Equity 500 Index Portfolio
Financial Highlights
For the Period Ended August 31, 2000*
The following table includes selected supplemental data and ratios to average
net assets:

See accompanying notes which are an integral part of the financial statements.
Annual Report 19
SSgA
Active International Fund
Statement of Operations
Amounts in thousands For the Fiscal Year Ended August 31, 2000

See accompanying notes which are an integral part of the financial statements.
20 Annual Report
SSgA
Active International Fund
Statement of Changes in Net Assets
Amounts in thousands For the Fiscal Years Ended August 31,

See accompanying notes which are an integral part of the financial statements.
Annual Report 21
SSgA
Active International Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.

(a) For the periods subsequent to August 31, 1998, average month-end shares
outstanding were used for this calculation.
(b) See Note 4 for current period amounts.
22 Annual Report
SSgA
Active International Fund
Notes to Financial Statements
August 31, 2000
1. Organization
The SSgA Funds (the "Investment Company") is a series mutual fund,
currently comprised of 24 investment portfolios which are in operation as
of August 31, 2000. These financial statements report on one portfolio,
the SSgA Active International Fund (the "Fund"). The Investment Company is
a registered and diversified open-end investment company, as defined in
the Investment Company Act of 1940, as amended (the "1940 Act"), that was
organized as a Massachusetts business trust on October 3, 1987 and
operates under a First Amended and Restated Master Trust Agreement, dated
October 13, 1993, as amended (the "Agreement"). The Investment Company's
Agreement permits the Board of Trustees to issue an unlimited number of
full and fractional shares of beneficial interest at a $.001 par value.
2. Significant Accounting Policies
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use
of management estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements.
Security valuation: International equity and fixed-income securities
traded on a national securities exchange are valued on the basis of the
last sale price. International securities traded over the counter are
valued on the basis of the mean of bid prices. In the absence of a last
sale or mean bid price, respectively, such securities may be valued on the
basis of prices provided by a pricing service if those prices are believed
to reflect the market value of such securities.
Money market instruments maturing within 60 days of the valuation date are
valued at amortized cost.
The Fund may value certain securities for which market quotations are not
readily available at "fair value," as determined in good faith pursuant to
procedures established by the Board of Trustees.
Securities transactions: Securities transactions are recorded on the trade
date basis. Realized gains and losses from the securities transactions are
recorded on the basis of identified cost.
Investment income: Dividend income is recorded on the ex-dividend date and
interest income is recorded daily on the accrual basis.
Amortization and accretion: All zero-coupon bond discounts and original
issue discounts are accreted for both tax and financial reporting
purposes. All short- and long-term market premiums/discounts are
amortized/accreted for both tax and financial reporting purposes.
Federal income taxes: Since the Investment Company is a Massachusetts
business trust, each fund is a separate corporate taxpayer and determines
its net investment income and capital gains (or losses) and the amounts to
be distributed to each fund's shareholders without regard to the income
and capital gains (or losses) of the other funds.
It is the Fund's intention to qualify as a regulated investment company,
as defined by the Internal Revenue Code of 1986, as amended. This requires
the Fund to distribute all of its taxable income. Therefore, the Fund paid
no federal income taxes and no federal income tax provision was required.
Annual Report 23
SSgA
Active International Fund
Notes to Financial Statements, continued
August 31, 2000
The Fund's aggregate cost of investments and the composition of unrealized
appreciation and depreciation of investment securities for federal income
tax purposes as of August 31, 2000 are as follows:
Net Unrealized
Unrealized Unrealized Appreciation
Federal Tax Cost Appreciation (Depreciation) (Depreciation)
---------------- ------------ -------------- --------------
$92,954,276 $14,773,633 $(6,885,219) $7,888,414
Dividends and distributions to shareholders: Income dividends and capital
gain distributions, if any, are recorded on the ex-dividend date. The Fund
declares and pays dividends annually. Capital gain distributions, if any,
are generally declared and paid annually. An additional distribution may
be paid by the Fund to avoid imposition of federal income tax on any
remaining undistributed net investment income and capital gains.
The timing and characterization of certain income and capital gain
distributions are determined in accordance with federal tax regulations
which may differ from generally accepted accounting principles ("GAAP").
As a result, net investment income and net realized gain (or loss) on
investment and foreign currency-related transactions for a reporting year
may differ significantly from distributions during such year. The
differences between tax regulations and GAAP relate primarily to
investments in foreign denominated investments, forward contracts, passive
foreign investment companies and certain securities sold at a loss.
Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting its net asset value.
Expenses: Most expenses can be directly attributed to the individual Fund.
Expenses of the investment company which cannot be directly attributed are
allocated among all funds based principally on their relative net assets.
Deferred organization expenses: The Fund has incurred expenses in
connection with its organization. These costs were deferred and are being
amortized over 60 months on a straight-line basis.
Foreign currency translations: The books and records of the Fund are
maintained in US dollars. Foreign currency amounts and transactions of the
Fund are translated into US dollars on the following basis:
(a) Market value of investment securities, other assets and liabilities
at the closing rate of exchange on the valuation date.
(b) Purchases and sales of investment securities and income at the
closing rate of exchange prevailing on the respective trade dates of
such transactions.
Reported net realized gains or losses from foreign currency-related
transactions arise from sales and maturities of short-term securities;
sales of foreign currencies; currency gains or losses realized between the
trade and settlement dates on securities transactions; and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the US dollar equivalent of the amounts
actually received or paid. Net unrealized gains or losses from foreign
currency-related transactions arise from changes in the value of assets
and liabilities, other than investments in securities, at fiscal year-end,
resulting from changes in the exchange rates.
It is not practical to isolate that portion of the results of operations
of the Fund that arises as a result of changes in exchange rates, from
that portion that arises from changes in market prices of investments
during the year. Such
24 Annual Report
SSgA
Active International Fund
Notes to Financial Statements, continued
August 31, 2000
fluctuations are included with the net realized and unrealized gain or
loss from investments. However, for federal income tax purposes the Fund
does isolate the effects of changes in foreign exchange rates from the
fluctuations arising from changes in market prices for realized gain (or
loss) on debt obligations.
Derivatives: To the extent permitted by the investment objectives,
restrictions and policies set forth in the Fund's Prospectus and Statement
of Additional Information, the Fund may participate in various
derivative-based transactions. Derivative securities are instruments or
agreements whose value is derived from an underlying security or index.
They include options, futures, swaps, forwards, structured notes and
stripped securities. These instruments offer unique characteristics and
risks that assist the Fund in meeting its investment strategies.
The Fund typically uses derivatives in three ways: cash equitization,
hedging, and return enhancement. Cash equitization is a technique that may
be used by the Fund through the use of options and futures to earn
"market-like" returns with the Fund's excess and liquidity reserve cash
balances. Hedging is used by the Fund to limit or control risks, such as
adverse movements in exchange rates and interest rates. Return enhancement
can be accomplished through the use of derivatives in the Fund. By
purchasing certain instruments, the Fund may more effectively achieve the
desired portfolio characteristics that assist in meeting the Fund's
investment objectives. Depending on how the derivatives are structured and
utilized, the risks associated with them may vary widely. These risks are
generally categorized as market risk, liquidity risk and counterparty or
credit risk.
Foreign currency exchange contracts: In connection with portfolio
purchases and sales of securities denominated in a foreign currency, the
Fund may enter into foreign currency exchange spot contracts and forward
foreign currency exchange contracts ("contracts"). Contracts are recorded
at market value. Certain risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms
of their contracts and are generally limited to the amount of unrealized
gain on the contracts, if any, that are recognized in the accompanying
Statement of Assets and Liabilities. Realized gains or losses arising from
such transactions are included in net realized gain (or loss) from foreign
currency-related transactions. Open forward foreign currency exchange
contracts at August 31, 2000 are presented in the accompanying Statement
of Net Assets.
Futures: The Fund is currently utilizing exchange-traded futures
contracts. The primary risks associated with the use of futures contracts
are an imperfect correlation between the change in market value of the
securities held by the Fund and the prices of futures contracts and the
possibility of an illiquid market. Changes in initial settlement value are
accounted for as unrealized appreciation (depreciation) until the
contracts are terminated, at which time realized gains and losses are
recognized.
Investment in international markets: Investing in international markets
may involve special risks and considerations not typically associated with
investing in the United States markets. These risks include revaluation of
currencies, high rates of inflation, repatriation, restrictions on income
and capital, and future adverse political and economic developments.
Moreover, securities issued in these markets may be less liquid, subject
to government ownership controls, delayed settlements, and their prices
more volatile than those of comparable securities in the United States.
3. Securities Transactions
Investment transactions: For the year ended August 31, 2000, purchases and
sales of investment securities, excluding short-term investments and
futures contracts, aggregated to $64,966,199 and $83,805,755,
respectively.
Annual Report 25
SSgA
Active International Fund
Notes to Financial Statements, continued
August 31, 2000
Securities lending: The Investment Company has a securities lending
program whereby each Fund can loan securities with a value up to 33 1/3%
of its total assets to certain brokers. The Fund receives cash (U.S.
currency), U.S. Government or U.S. Government agency obligations as
collateral against the loaned securities. To the extent that a loan is
secured by cash collateral, such collateral shall be invested by State
Street Bank and Trust Company in short-term instruments, money market
mutual funds, and such other short-term investments, provided the
investments meet certain quality and diversification requirements. Under
the securities lending arrangement, the collateral received is recorded on
the Fund's statement of assets and liabilities along with the related
obligation to return the collateral. In those situations where the Company
has relinquished control of securities transferred, it derecognizes the
securities and records a receivable from the counterparty.
Income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs, is
divided between the Fund and State Street Bank and Trust Company and is
recorded as interest income for the Fund. To the extent that a loan is
secured by non-cash collateral, brokers pay the Fund negotiated lenders'
fees, which are divided between the Fund and State Street Bank and Trust
Company and are recorded as interest income for the Fund. All collateral
received will be in an amount at least equal to 102% (for loans of U.S.
securities) or 105% (for non-U.S. securities) of the market value of the
loaned securities at the inception of each loan. Should the borrower of
the securities fail financially, there is a risk of delay in recovery of
the securities or loss of rights in the collateral. Consequently, loans
are made only to borrowers which are deemed to be of good financial
standing. As of August 31, 2000, the value of outstanding securities on
loan and the value of collateral amounted to $9,443,727 and $9,931,085,
respectively. Included in interest income is securities lending income of
$81,328 for the year ended August 31, 2000.
4. Related Parties
Adviser: The Investment Company has an investment advisory agreement with
State Street Bank and Trust Company (the "Adviser") under which the
Adviser, through State Global Advisors, the investment management group of
the Adviser, directs the investments of the Fund in accordance with its
investment objectives, policies, and limitations. For these services, the
Fund pays a fee to the Adviser, calculated daily and paid monthly, at the
annual rate of .75% of its average daily net assets. The Adviser
voluntarily agreed to waive up to the full amount of its advisory fee to
the extent that total expenses exceeded 1.00% of its average daily net
assets on an annual basis. The total amount of the waiver for the year
ended August 31, 2000 was $298,667. The Investment Company also has
contracts with the Adviser to provide custody, shareholder servicing and
transfer agent services to the Fund. These amounts are presented in the
accompanying Statement of Operations.
In addition, the Fund has entered into arrangements with its Adviser
whereby custody credits realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's expenses. During the year, the
Fund's custodian fees were reduced by $1,046 under these arrangements.
Administrator: The Investment Company has an administration agreement with
Frank Russell Investment Management Company (the "Administrator"), a
wholly-owned subsidiary of The Northwestern Mutual Life Insurance Company,
under which the Administrator supervises all non-portfolio investment
aspects of the Investment Company's operations and provides adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery supplies, and similar items. The
Investment Company pays the Administrator for services supplied by the
Administrator pursuant to the Administration Agreement, an
26 Annual Report
SSgA
Active International Fund
Notes to Financial Statements, continued
August 31, 2000
annual fee, payable monthly on a pro rata basis. For the period September
1, 1999 to April 30, 2000, it is based on the following percentages of the
average daily net assets of all international funds: $0 up to and
including $500 million - .07%, over $500 million up to and including $1
billion - .06%, over $1 billion up to and including $1.5 billion - .04%,
over $1.5 billion - .03%. Effective May 1, 2000, the annual fee is based
on the following percentages of the average daily net assets of all
International portfolios: $0 to $1 billion - .07%; over $1 billion - .05%.
The Administrator will charge a flat fee of $30,000 per year per Fund with
less than $500 million in net assets and $1,500 per year for monthly
performance reports and use of Russell Performance Universe software
product. In addition, the Fund reimburses the Administrator for
out-of-pocket expenses and start-up costs for new funds.
Distributor and Shareholder Servicing: The Investment Company has a
Distribution Agreement with Russell Fund Distributors (the "Distributor")
which is a wholly-owned subsidiary of the Administrator to promote and
offer shares of the Investment Company. The Distributor may enter into
sub-distribution agreements with other non-related parties. The amounts
paid to the Distributor are included in the accompanying Statement of
Operations.
The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the
"Plan") under the 1940 Act. Under this Plan, the Investment Company is
authorized to make payments to the Distributor, or any Shareholder
Servicing Agent, as defined in the Plan, for providing distribution and
marketing services, for furnishing assistance to investors on an ongoing
basis, and for the reimbursement of direct out-of-pocket expenses incurred
by the Distributor in connection with the distribution and marketing of
shares of the Investment Company and the servicing of investor accounts.
The Fund has Shareholder Service Agreements with the Adviser, State Street
Brokerage Services, Inc. ("SSBSI"), a wholly-owned subsidiary of the
Adviser, the Adviser's Retirement Investment Services Division ("RIS"),
the Adviser's Metropolitan Division of Commercial Banking ("Commercial
Banking") and State Street Solutions ("Solutions")(collectively the
"Agents"), as well as several unaffiliated service providers. For these
services, the Fund pays .025%, .175%, .175%, .175% and .175%, to the
Adviser, SSBSI, RIS, Commercial Banking, and Solutions, respectively,
based upon the average daily value of all Fund shares held by or for
customers of these Agents. For the year ended August 31, 2000, the Fund
was charged shareholder servicing expenses of $20,982, $1,681, $68, $17
and $8,501, by the Adviser, SSBSI, RIS, Commercial Banking, and Solutions,
respectively.
The combined distribution and shareholder servicing payments shall not
exceed .25% of the average daily value of net assets of the Fund on an
annual basis. The shareholder servicing payments shall not exceed .20% of
the average daily value of net assets of the Fund on an annual basis.
Payments that exceed the maximum amount of allowable reimbursement may be
carried forward for two years following the year in which the expenditure
was incurred so long as the plan is in effect. The Fund's responsibility
for any such expenses carried forward shall terminate at the end of two
years following the year in which the expenditure was incurred. The
Trustees or a majority of the Fund's shareholders have the right, however,
to terminate the Distribution Plan and all payments thereunder at any
time. The Fund will not be obligated to reimburse the Distributor for
carryover expenses subsequent to the Distribution Plan's termination or
noncontinuance. There were no carryover expenses as of August 31, 2000.
Annual Report 27
SSgA
Active International Fund
Notes to Financial Statements, continued
August 31, 2000
Board of Trustees: The Investment Company paid each Trustee not affiliated
with the Investment Company an annual retainer, plus specified amounts for
board and committee meetings attended. These expenses are allocated among
all of the funds based upon their relative net assets.
Accrued fees payable to affiliates and trustees as of August 31, 2000 were
as follows:
Advisory fees $ 37,109
Administration fees 7,950
Custodian fees 42,735
Distribution fees 2,878
Shareholder servicing fees 11,960
Transfer agent fees 7,860
Trustees' fees 1,610
--------
$112,102
========
5. Fund Share Transactions (amounts in thousands)